Planning to take a car loan? Some lenders have waived processing fee

Be on the look out for more such offers during this festive season

• Interest rates on new car loans start from as low as 8.4 per cent and go as high as 12.25 per cent. 

• On a loan of Rs 9 lakh taken for a tenure of five years at 8.4 per cent, the borrower would pay an EMI of Rs 18,422. His total interest cost would be Rs 2,05,292.

• If the borrower were to take the same loan at a rate of 12.25 per cent, his EMI would be Rs 20,134. The total interest cost he would pay would be Rs 3,08,033.

• In other words, his interest burden would rise by as much as Rs 1,02,741.    

• This example underlines the importance of comparing rates of different players.

• Having a good credit score can also help. Players like Bank of Baroda will charge you zero or a lower strategic premium if you have a good score. 

• With the onset of the festival season, many players have reduced their processing fees on this loan. Some have even waived it altogether