India is witnessing a surge in
sales in the automotive sector. The sales figures of all the leading two
wheeler and four wheeler manufacturers are booking a phenomenal rise;
this increase in the demand of automotive can be attributed to the ease
of availability of automobile loans by various banks. Banks are offering
these loans to its customers at attractive rates to increase the
consumer base; banks are funding the purchase of new vehicles and
refinancing the old ones too. Car loans is the fastest increasing
segment in the auto loans category. Automobile required for commercial
purpose are also financed by banks at lower rates. Private sector banks
are moving ahead of the their public sector counterparts due to better
service.
Types Of Auto Loans Available:
There has been a growing trend of
getting purchase of automotives financed. According to a research, as
much as 75% of the vehicles purchased in the last decade were financed/
purchased through auto loans. Two wheelers, cars, commercial vehicles
are increasingly being purchased on loans. Banks and various non-banking
finance companies are cashing on this trend by offering attractive
automotive loans. Major automotive manufacturers are tying up with banks
for providing auto loans. Easy finance schemes have pushed the auto
sales further.
Maximum loan offered by Banks for Auto Loans:
In case of new
vehicles, banks generally finance up to a maximum of 90% of the cost of
the vehicle.
In case of old/second hand vehicles, banks finance up to a maximum of
85% of the value of the vehicle. Repayment is done by Equated Monthly
Installments or EMI.
Interest Charged by Bank on Auto Loans:
Although Public sector
banks are offering lower interest rate than their private counterparts
but they are lagging behind due to poor quality of service. Interest
rates depend on the automotive model, loan tenure. Interest is generally
calculated on a monthly reducing balance.
Process Of Auto Loans Application:
Customers can contact the
bank representative and apply for an auto loans. They can also fill
online forms. There is no processing fee for new cars in most
banks/finance companies. However, some companies do charge a minimal
processing fee for used automotives.
Documents Required for Auto Loans:
- Application Form
- Photographs
- Proof of income of last two years
- Proof of Residence
- In case of public/Private companies, a certifies copy of MOA and
AOA.
List of Some of Banks Offering Auto Loans:
