Dream car dream is no longer a distant dream, thanks to car loan

The recent Navratras set off suppressed demand levels for the likes of Maruti Swift, Dzire or A-Star. The reason for it is that bookings for these hatchbacks and sedans have hit such a degree that even the upper management of these organisations is looking for some methods to rev up their production.

The story of high demand levels is not confined to Maruti but the trade names like Hyundai, Honda and Chevrolet are also seeing the demand hike of 7-10% during the present festive season. But one question that has been troubling people is what on Earth has happened that has produced this sharp positive shift.

The answer is quite simple. It is the cheap sedan funding schemes that are being made available in a convenient manner.

Both Private sector such as ICICI Bank, IDBI Bank, HDFC Bank, Kotak Mahindra Bank, Tata Capital, Canara Bank as well as public sector banking entities like State Bank of India have been throwing in potent financing deals that has not only delivered goods for the makers but has also resulted into growth in demand levels from rural areas.

Talking of private lenders, the biggest of them all, ICICI Bank is throwing in the car loan up to the max. limit of 90% of ex-showroom price of any four-wheeler and that too with the refunding time-period of 5 years.

Thing to remember : Excellent yearly salary and excellent credit record are the guarantee of pacey disbursal of such loan products.

HDFC Bank is another name that is becoming famous for its 100 percent car funding deals. However, the terms and conditions here too varies for salaried person as well as for self-employed person. Loan products with a repayment tenure of 1-7 years, are being provided by banks.

Moving ahead to the public sector banks, which are rendering different schemes to lure customers, State Bank of India is offering sedan loan products at the fixed rate of 8% which will be step-upped to 10% from the next year.

Car loan assistance from Canara Bank is arriving at a fixed interest rate of 8 percent in the first year; 9 percent in the following year and 10.5 percent for IIIrd to Vth year. IDBI too has joined the competition, providing deals on akin lines. But the best deals in city are with those lending organisations which have tied up with car dealers.

With Hyundai inking MoU with Bank of Rajasthan and Central Bank, getting auto loans for customer at lower rate of interest and bearable terms and conditions is possible.

The monetary organisations are also taking full advantage of recent relief provided by Reserve Bank of India, by supplying their customers with 10.5% rate of car loan products without charging no processing fee and foreclosure prices.

With Reserve Bank of India providing alleviation to the banks and banks transferring benefits to clients, it seems like India is very well on its way to revivification.