Leading banks have rolled out attractive car-financing schemes for government employees and pensioners after the Seventh Pay Commission salary revision. The highlights include up to 100 per cent financing, lower interest rates, and processing charges.
There are 4.8 million central government employees and 5.5 million pensioners who benefit from the pay hikes. Car loans form a significant chunk of the retail loan business of banks.
The country’s biggest bank State Bank of India is offering 100 per cent financing of the on-road price of cars for government employees compared to 90 per cent earlier. The bank’s interest rate for male government employees is 9.7 per cent and for female employees 9.65 per cent. These are lower than the earlier uniform rate of 9.75 per cent. The foreclosure charge has also been waived.
HDFC Bank is offering 90 per cent funding of the on-road price of cars for government employees. Against earlier processing fees ranging from Rs 2,885 to Rs 5,150 depending on the quantum of the loan, a flat fee of Rs 599 is on offer. The interest rate on HDFC Bank car loans is 9.65 per cent. “We are also offering credit shield and insurance funding options,” a bank spokesman said.
Axis Bank is now funding the entire on-road cost of cars for government employees. Loan tenures have been increased to eight years from seven earlier. It has lowered the interest rate to 9.97 per cent from 9.99-10.25 per cent and has also brought down foreclosure charges.
Car makers, too, have announced sops for government employees in recent months.
Hyundai is offering benefits of Rs 7,000 on the Grand i10 and Xcent and Rs 5,000 each on the i10 and the Eon. Tata Motors offers central and state government employees additional cash discounts or the option to buy extended warranty, annual maintenance packages as well as accessories.
Two-wheeler majors Hero MotoCorp and Honda also offer exclusive discounts and offers to government employees and pensioners.