Planning to purchase a car this Holi? Here are the best loan rates

Banks offer a range of interest rates, starting as low as 8.45 per cent from UCO Bank and going up to 14.85 per cent at City Union Bank.

If you are contemplating purchasing a new car this Holi, whether it's an upgrade or the first family car, banks are currently enticing customers with attractive EMIs and flexible repayment options. Opting for a loan emerges as a cost-effective choice for numerous buyers, facilitating easier payments through reduced equated monthly instalments (EMIs).

Union Bank of India stands out in this regard, offering an appealing interest rate ranging from 8.70 per cent to 10.45 per cent, accompanied by a reasonable processing fee of Rs 1,000. The processing fee on loan is a one-time charge that lenders impose to cover the costs associated with processing and approving the loan application. 

Punjab National Bank comes in second, with interest rates ranging between 8.75 per cent and 10.60 per cent. Their processing fee is set at 0.25 per cent of the loan amount, falling within the range of Rs 1,000 to Rs. 1500.

Bank of Baroda provides a spectrum of interest rates from 8.75 per cent to 12.10 per cent. The flexibility extends to the processing fee, capped at a maximum of Rs 2,000. This variety allows buyers to choose a plan that best suits their financial preferences.

Among private banks, HDFC Bank is offering interest rates from 8.75 per cent, with a starting EMI of Rs 10,319 onwards on the loan amount of Rs 5 lakh for a tenure of 5 years, and a processing fee of 0.50 per cent (Rs 3,500 - Rs 8,000)

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

 

The table compiled policy bazar revealed a range of interest rates, starting as low as 8.45 per cent from UCO Bank and going up to 14.85 per cent at City Union Bank. EMIs, too, varied significantly, with Canara Bank offering the lowest EMI for a Rs 5-lakh loan at Rs. 10,307, while Bank of Maharashtra offered the highest at Rs 11,377. Processing fees added another layer of complexity, ranging from being waived off entirely by Canara Bank for a limited time to a hefty Rs 10,000 charged by IDFC First Bank.

It's important to be mindful that cars depreciate over time, making it less prudent to opt for a substantial loan. Conversely, while shorter loan terms result in higher monthly payments, failing to meet these payments can have adverse effects on your credit score.