HDFC Bank has launched a 'Car Loan Mela' in select regions of India. The bank is hosting the event on June 2 and 3, at around 650 branches across Rajasthan, Madhya Pradesh, Chhattisgarh, Northern Maharashtra, and Vidarbha.
During the two-day event being held in partnership with leading automobile brands and car dealers, the customers will be provided to take test drives of the vehicles. The bank will offer on-the-spot loan approvals to eligible customers for all car categories, ranging from standard to premium models.
Through the event, the HDFC Bank aims to make automobile finance more accessible, especially in semi-urban and rural areas, by offering a diverse range of loans at affordable interest rates. As per the bank, the 'Car Loan Mela' event is designed to provide customers with a hassle-free experience, ensuring easy access to financing solutions. The bank will offer a comprehensive end-to-end solution for processing loan requests, featuring various repayment configurations and minimising paperwork requirements.
As part of the financing schemes, HDFC Bank is introducing three repayment options: regular, step-up, and balloon repayment. The regular repayment option calculates eligibility based on the borrower's current income, while the step-up and balloon repayment options consider a combination of current income and expected income growth.
Under the 'Car Loan Mela', customers can benefit from up to 100 percent on-road funding for select car models. The bank is offering loan amounts up to Rs 10 crore with flexible repayment tenures ranging from 12 to 84 months (7 years). Interest rates will vary based on the borrower's credit profile and repayment history, starting from 8.85 percent onwards.
In addition to competitive interest rates, HDFC Bank provides several additional features to enhance the car loan experience. These include zero foreclosure charges, eligibility for a top-up loan after nine months, and insurance benefits covering permanent total disability, accidental death, and accidental hospitalisation.
In the step-up EMI scheme, the equated monthly installment (EMI) increases over time, offering a distinct repayment structure compared to the standard EMI scheme where the EMI remains constant throughout the loan tenure. For example, borrowers have the option to incrementally raise their EMI by 11 percent annually throughout the loan duration.
While, in the balloon repayment scheme, borrowers have the flexibility to repay a portion of the loan amount as equated monthly installments (EMIs) throughout the loan tenure, with the remaining balance paid in a lump sum at the end of the loan period. Unlike the step-up repayment scheme, where EMIs gradually increase, the balloon repayment option allows customers to make equal EMIs for a predetermined amount and settle the remaining balance in a final bulk payment.
For the fiscal year ending on March 31, 2023, HDFC Bank recorded an impressive auto loan book size of Rs 1,17,429 crore. Last year, the bank introduced the innovative 'Xpress Car Loan' facility, a cutting-edge digital API platform that enables credit loans to be disbursed into dealers' accounts within approximately 30 minutes.
