Union Bank car loan starts from 7.90%:SBI also reduces interest rates; know about the keep the loan tenure

Since the reduction in GST rates, car sales in the country have increased. Initial estimates from the auto industry suggest that 4,70,000 cars were sold in the country in October. This is 17% more compared to October 2024. In such a situation, if you are planning to buy a car these days and want to take a loan for it, the first thing you need to know is which bank is offering a loan at what interest rate. State Bank of India (SBI) has also recently reduced its car loan interest rates. It is offering car loans at an annual interest rate of 8.75%. Meanwhile, Union Bank of India’s interest rates start from 7.90%. Higher interest has to be paid for longer loan terms You should take a loan for as short a duration as possible; the loan should not be stretched too long. Generally, a car loan can be taken for a maximum of 8 years, but for longer periods, i.e. 7 to 8 years, the loan is given at a higher interest rate. This interest rate can be up to 0.50% higher than the interest rate for shorter-term loans (3 to 4 years). Loan interest rate also depends on credit score Car loan interest rate also depends on your credit score. If the credit score is good, there is a possibility of getting a loan easily and at a lower interest rate. Additionally, banks generally provide loans at lower interest rates to those with regular income sources. Keep these 3 things in mind while taking a loan. 1. Pay attention to the pre-closure penalty When taking a car loan, you should check whether the bank you are borrowing from charges a pre-closure penalty. Pre-closing means paying the loan amount before the tenure ends. Penalty rates are not the same for all banks. Therefore, choose a bank carefully. Consider banks that either do not charge penalties or collect very minimal amounts. 2. Check processing fees Almost every bank charges a fixed amount for processing car loan applications. Sometimes, it is seen that while some banks and agencies offer car loans at low interest rates, they charge quite high processing fees when disbursing the loan. Therefore, before taking a loan, you should check with the bank how much processing fee they will charge for processing the loan. 3. Special offers and schemes Most banks offer special deals on car loans during festival seasons or specific periods of the year. One should take advantage of such offers. These offers include discounts on processing fees and pre-closure penalties, 100% funding on vehicles, low or 0% interest rates, special gift vouchers, etc. People with good credit profiles can get the best deals. Documents Required for Car Loan