RBI Considering To Reduce Car Loan Rates

Published: Tuesday, April 17, 2012, 13:28 [IST]

Here is good news for both carmakers as well as car buyers. The Reserve Bank of India will announce its financial policy for the year 2012-13 and experts expect it to reduce lending rates for the first time in three years. The lowered lending rates will reduce car loan interest rates too making car buying less burdensome on the pocket.

The Reserve Bank of India has so far increased lending rates several times in the past three years in an effort to control inflation. However this also meant cheap car loans became increasingly difficult to get. High interest rates on car loans had a severe impact on car sales too. Last year all major carmakers saw their sales decline primarily due to increased car loan interest rates and fuel prices.

With inflation showing signs of slowing down, the RBI is said to be considering lowering lending rates by at least 50 basis points. This will reduce your car loan interest rates by 0.5%. If car loans become cheaper to get, many people who had withheld their decision to buy a new car will reconsider bringing in more people to car showrooms.

The recent budget has lead to an increase in car prices across the board. The high interest loans has acted as deterrent to many buyers and if the RBI reduces interest rates the cost of buying a car will definitely come down. Carmakers will also hope that increased interest will translate in to increased sales.

Article Published On: Tuesday, April 17, 2012, 12:28 [IST]

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