ICICI, Axis cut car loan rates

The car finance market is hotting up with ICICI Bank and Axis Bank slashing interest on new car loans.

While ICICI Bank has cut its car loan rates by 0.25-0.5 per cent, Axis Bank today announced a reduction of 0.5-0.75 per cent for loans having three-five years maturity for new customers.

"ICICI Bank has cut its car loan rates by 0.25-0.5 per cent to 9.5-11.5 per cent, depending on the category and tenure of loans," a source close to the development told PTI here today.

When contacted, an ICICI Bank spokesperson tersley said: "Our auto loan rates are in line with competition."

The largest private lender had revised its rates downwards last October as part of the festive offer.

It can be noted that ICICI has been very going slow on the entire lending business especially the auto loans since 2008 following its lending spree from 2005 through 2007. Also, ICICI was the only major domestic bank which was adversely impacted by the global credit crisis.

The largest private sector bank had even discontinued two-wheeler loans last year.

The reduction in car loan rates by biggies like ICICI Bank and Axis are likely to put pressure on other banks to follow suit.

"Based on customer research and interactions as well as market feedback we feel that this is the appropriate time to offer new rates to new customers," Axis Bank President (Retail Banking) Manju Srivatsa said here today.