Car Loans Get Expensive Due To RBI Rate Hike
The hiking rates of Reserve bank of India may shatter your dreams to buy your dream cars. The interest rates on car loans have been lifted up anything between 75 - 100 basis points, by Car loan lenders. This increase will result in Rs 50 monthly increase on a five year loan which has a daily rest basis.
According to report of the Direct selling agents (DSAs) of ICICI Bank to TOI, they have received a communique from the bank about the hike effective from Monday. Officials said, “We used to lend at rack rates of 15% per annum, we are now been told that the new rates will be 16% effective from Monday,”
Sumit Bali, CEO of Kotak Mahindra Prime said, “Our new rates will be decided on Wednesday. The broad indication is that the rates would go up by anything between 50 to 75 basis points. Our current rack rate is around 15.75%.”
After this rate hike announcement the Rule of demand may apply in the market and the demand of car loans may decrease. On the other side car buyers are now interested to have a personal loans rather than car loans. An SBI spokesperson inform that “A personal loan from SBI can be availed at 12.75%, while car loans for up to 3 years can be availed at 11.5% and goes up to 12% for a seven year loan.”