Is SBI Car Loan Ruling the Roost in Auto Finance Segment?

sbi car loan

A car on your wishlist in the new year 2018? Get your wish fulfilled via a car loan from a list of lenders including the mass favourite State Bank of India (SBI), with over 25,000 branches spread across the country. The bank not only finances the hatchbacks but even the trendy Sports Utility Vehicles (SUVs).

The availability of finance is there, but what about the interest rates and charges that SBI levies? Do they come lower than what’s being charged by others in the auto finance segment? Let’s find out in our segment of SBI Car Loan vs its competing products.

SBI Car Loan Interest Rate

In search of SBI Car Loan Interest Rate? Let us be told that the rates have now come down to 8.70%-9.20%, 75-125 basis points higher than the 1-year MCLR of 7.95%. While for the used cars, the country’s largest lender charges 12.60%. While a new car can be financed to a maximum of 85% of the on-road price, which is a total of ex-showroom price + RTO + accessory charges + insurance, etc, the second-hand vehicle finance is limited to 80% of the resale value. The processing fee amounts to 1,000 -1,500 plus GST for a new car loan. On the other side, the used car finance would bear a fee of 450 – 9,100 + GST.

HDFC Car Loan Interest Rate

HDFC Bank is a fierce competitor to SBI’s supremacy in the lending business, including a car loan. By providing customized loans at attractive interest rates, the private lender keeps the banking behemoth SBI on its toes. The private biggie charges 9%-10.25% for a new car and 11.50%-17.50% for a used vehicle. You can receive up to 100% finance for a variety of cars. The second-hand cars can be financed to 60%-65% of the value of the vehicle. While the processing fee for a new car is calculated at 0.4% of the loan amount or ₹10,000, whichever is lower. The older cars come with a fee at 2% of the loan amount, subject to a maximum of ₹5,000.

ICICI Car Loan Interest Rate

ICICI Bank, like HDFC Bank, also gives a nail biting competition to SBI by lending at 10%-12.75% per annum for a new car. The used car finance, on the other hand, comes at 15%. You can receive a loan up to 100% of the ex-showroom price of the car. The used car loan is limited to 80% of the value of the vehicle. Be ready to pay a processing fee of 2,500-5,000 on a new car loan and 2% of the loan amount or ₹6,000, whichever is lower, when it comes to used car finance.  

Even as the competition gets intense, SBI still holds a marginal edge over the competitors in terms of lower interest rate offering. On the maximum loan front, HDFC is ahead. But where the game tilts in favour of SBI is the economy of charges such as processing fee, which could tempt many to apply for a car loan at the public lender.

Is It the Time to Check SBI Car Loan EMI Calculator?

Now that you get to know SBI Car Loan tops the list, it’s time to study even deeper and check out the amount a borrower would pay over the course of his/her loan tenure. For that, you need to understand the function of car loan EMI Calculator. What the calculator does well is to give you a summary of the repayment ahead. This helps manage your spends well to make sure the repayments are made without any hassle.

Interested to know how it prepares the repayment summary? It just takes into account the loan amount, interest rate and the tenure to come with the EMI payable on your car loan. There’s a formula based on which the calculator performs its operations. Take a look below to know that.

E = P . R . (1+R)^N/((1+R)^N – 1)


P= Principal Loan Amount

R= Monthly Interest Rate

N= Number of Monthly Installments

Vikas Das is one of those expert writers in finance who has enlightened the readers about various banking and investment products like personal loan, home loan, car loan, mutual fund, fixed deposit and others.

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