Car loan EMIs may rise by up to Rs 5,000
Car loans will see an interest rate hike for the fourth time in a row in as many months, this weekend.
By TNN |
NEW DELHI: Car loans will see an interest rate hike for the fourth time in a row in as many months, this weekend. Top financiers like ICICI and Kotak are increasing auto interest rates by 75-100 basis points. This means car buyers will have to shell out anywhere between Rs 500-5,000 extra per month as EMI payout. According to Kotak Mahindra’s Sunit Bali, the increase in cash reserve ratio is being passed on to the consumers to a certain extent. “We plan to hike car loan interest rates by about 100 basis points,” he said.
So typically a Rs 3 lakh car loan for three years would pinch you by Rs 450 per month or Rs 5,400 a year. For a mid-size car loan worth Rs 5 lakh over 36 months, the pinch will be sharper at Rs 1,350 per month or Rs 16,200 a year. The bite obviously gets worse as the tag price of the car increases.
Kotak isn’t the only one to go in for another interest hike. ICICI also plans to increase rates by 75-100 basis points. So if you opt for an ICICI loan worth Rs 3 lakh, the pinch will be Rs 300 a month or Rs 3,600 a year. For a Rs 5 lakh loan, the annual pinch will be Rs 9,000. Fellow financing biggie HDFC, however, is holding its rates for now. Said Ashok Khanna, executive vice-president, HDFC: “As of now, we have no immediate plans to increase any interest loans. However, we will react to market conditions accordingly.”
The latest round of hikes will add to the total cumulative cost of ownership significantly. Since December, the four rate increases have piled on Rs 11,000-12,000 per year on loans for cars like the Omni or M800, around Rs 19,000-20,000 on loans for cars like the Santro, Alto, Swift or Getz and around Rs 30,000-34,000 on C-segment cars like the Ikon, Accent, Fiesta and Verna.
So typically a Rs 3 lakh car loan for three years would pinch you by Rs 450 per month or Rs 5,400 a year. For a mid-size car loan worth Rs 5 lakh over 36 months, the pinch will be sharper at Rs 1,350 per month or Rs 16,200 a year. The bite obviously gets worse as the tag price of the car increases.
Kotak isn’t the only one to go in for another interest hike. ICICI also plans to increase rates by 75-100 basis points. So if you opt for an ICICI loan worth Rs 3 lakh, the pinch will be Rs 300 a month or Rs 3,600 a year. For a Rs 5 lakh loan, the annual pinch will be Rs 9,000. Fellow financing biggie HDFC, however, is holding its rates for now. Said Ashok Khanna, executive vice-president, HDFC: “As of now, we have no immediate plans to increase any interest loans. However, we will react to market conditions accordingly.”
The latest round of hikes will add to the total cumulative cost of ownership significantly. Since December, the four rate increases have piled on Rs 11,000-12,000 per year on loans for cars like the Omni or M800, around Rs 19,000-20,000 on loans for cars like the Santro, Alto, Swift or Getz and around Rs 30,000-34,000 on C-segment cars like the Ikon, Accent, Fiesta and Verna.
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