Finance and its interest rate are thoroughly investigated before buying a vehicle in India, people turn more towards the bank which provides loan at low interest rate. However, the interest rates on vehicle loans are low for almost two years. While some banks like SBI and HDFC Bank have recently increased their deposit rates for certain tenures. Whereas at present some customers still get confused in Fixed and Floating interest rate, if you also wish to get finance while buying a vehicle, then this article is for you. We are going to tell you about those banks in the country which provide the cheapest car loan:
First of all know what is the difference between Fixed and Floating Interest Rate?
Fixed interest rate means that your interest rate remains the same throughout the tenure of your loan. These do not change even if there is any change in the repo rates of the Reserve Bank of India (RBI). At the same time, the monthly installments (EMI) in this interest rate will also remain the same throughout the tenure. While some financiers offer loans that have an interest rate only for the first few years of the tenure, switch to a floating interest rate later. The special feature of fixed interest rate is that it does not fluctuate over time, your EMI is stable, so that you can easily plan monthly budget and long-term financial savings or investments accurately.
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Whereas the floating interest rate varies with the market. The interest will be calculated on the base rate basis so that when the base rate changes, the floating rate also changes. Floating interest rates are usually 1% to 2.5% lower than the fixed interest rate offered by the same lender. This means that even if the floating interest rate increases, it is still lower than the fixed interest rate.
Cheapest loan is available in these banks
Currently the cheapest bank loan is offered by Kotak Mahindra Bank, KMB currently offers car loans at an interest rate of 7.25 per cent, followed by private sector bank Axis Bank at 7.45 per cent. Along with this, you can check the given image to know about the interest rate of other banks.
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