SBI freezes car loan rates for one year

After home loans, State Bank of India (SBI) today announced a limited-period offer to disburse auto loans for which interest rates would be frozen at 10 per cent for a year.The scheme applies to all auto loans disbursed up to May 31 and interest rates will revert to the applicable rate afterJune 1 next year. In a statement, the bank said it would offer loans for a seven-year period, with interest calculated on a daily outstanding balance basis, “which reduces the interest burden on the borrower as against the monthly outstanding balance or flat rate basis as charged by a few others”. SBI also said it offered loans without the payment of an advance equated monthly instalment.In contrast, ICICI offers auto loans at 12.25-12.50 per cent and HDFC Bank 12.50 per cent.Public sector players Bank of Baroda (BoB) and Bank of India (BoI), however, said they would not follow SBI. BoB offers car loans at 10.5 per cent and BoI at 10.25-11.25 per cent.