Buying a car this Diwali? Here are the latest loan rates, processing fees

If you are thinking about buying a new car this festive season, be it an upgrade or a first car for the family, banks are offering attractive EMIs and repayment tenures. Taking out a loan can be an affordable option for many buyers as it makes payment easier with smaller equated monthly instalments (EMIs).

To make it more attractive, some banks are offering additional interest concessions of up to 0.25 per cent for existing housing loan borrowers and corporate salary account holders, according to Paisabazaar.com. 

Notably, Punjab and Sind Bank is also offering up to 50 per cent concession on processing fees for ‘PSB Apna Vahan Sugam’, a scheme available for government employees for purchase two-wheelers and four-wheelers. 

Here is a list curated by Paisabazaar.com on car loans offered by more than 18 banks with loan rates, EMIs and processing fee:

NEW CAR LOAN-RATES AND CHARGES
Name of Lender	Interest rate (%)	EMI (Rs) Loan amount-5 lakh Tenure-5 years	Processing fee (% of loan amount)
Union Bank of India	8.75 - 10.50	10,319 - 10,747	Up to Rs 1,000
Punjab National Bank	8.75 - 9.60	10,319 - 10,525	0.25% (Rs. 1,000 - Rs. 1,500)
Bank of Baroda	8.70 - 12.10	10,307 - 11,148	Up to Rs 500
Canara Bank	8.70 - 11.95	10,307 - 11,110	Nil till 31 December 2023
Bank of India	8.75 - 10.75	10,319 - 10,809	Nil
UCO Bank	8.45 - 10.55	10,246 - 10,759	Nil
State Bank of India	8.65 - 9.70	10,294 - 10,550	Nil
IDBI Bank	8.75 - 9.55	10,319 - 10,513	Rs 2,500
Bank of Maharashtra*	8.70 - 13.00	10,307 - 11,377	Nil
Indian Overseas Bank**	8.85 onwards	10,343 onwards	0.50% (Rs 500 - Rs 5,000)
ICICI Bank	8.95 onwards	10,367 onwards	Rs 999 - Rs 8,500
HDFC Bank	8.75 onwards	10,319 onwards	0.50% (Rs 3,500 - Rs 8,000)
Karnataka Bank	8.95 - 11.30	10,367 - 10,946	0.60% (Rs 3,000 - Rs 11,000)
Federal Bank	8.85 onwards	10,343 onwards	Rs 2,000 - Rs 4,500
Punjab and Sind Bank***	8.85 - 10.25	10,343 - 10,685	0.25% (Rs. 1,000 - Rs. 15,000)
South Indian Bank	8.75 onwards	10,319 onwards	1% (Max: Rs 10,000)
IDFC First Bank	9.00 - 13.50	10,379 - 11,505	Up to 3.5%
City Union Bank	14.25 - 14.75	11,699 - 11,829	1.25% (Min: Rs 1,000)
*0.25% interest rate concession for existing housing loan borrowers and corporate salary account holders.
**0.50% interest rate concession to borrowers with credit scores of 750 and above. Interest rate concession of 0.20% to borrowers for financing Electric 4 Wheelers. 0.20% concession to existing Housing Loan Borrowers.
***Concession of up to 50% on processing fee for PSB Apna Vahan Sugam.
Rates and charges as of October 25, 2023
Source: Paisabazaar.com

 One should note that cars lose value over time, so it's not always wise to take a big loan. On the flip side, shorter loans have larger monthly payments, and missing payments can be harmful for your credit score. 

As the festival season peaks, car dealerships across India are offering discounts ranging from Rs 25,000 to more than Rs 1 lakh on various models. These discounts are higher than those offered in the 2022 festival period, which was affected by supply-chain issues related to electronic components for cars.

As Business Standard reported earlier, "The average increase in discounts from 2022 to 2023 is 40-50 per cent, depending on the car model and dealership location. Discounts on certain models have jumped up to 75 per cent. Some of these schemes are offered by original equipment manufacturers (OEMs) and others by dealers. These discounts primarily apply to less popular models. Dealership sources indicated models such as the Maruti Suzuki Celerio, Swift, and Ciaz had discounts in the Rs 35,000-Rs 50,000 range."