Which bank gives auto loan to those who want to buy a car with a loan?
By Rabindra Dhungel, 16 september 2020. Most of the vehicles sold in the world are financed by financial institutions. At present, only 50 percent of the value of a loan car can be given in Nepal. But, until a few years ago, 80 percent of the finance facility was available. Standard Chartered Bank has started retail banking in Nepal.
Initially, by paying down a certain amount and paying the remaining amount in easy monthly installments according to your income, many customers are attracted.
NIC Asia Bank, which has been establishing itself as an aggressive bank in Nepal, has offered auto loan at 8.25 percent interest rate for the first time since the lockout. According to his offer, the interest rate will remain stable for one year and the service charge will be only 0.25 percent.
Similarly, the international brand Standard Chartered Bank has started giving auto loans at an interest rate of only 7.59 percent. Himalayan Bank has offered auto loans of 8.49 percent for personal vehicles and 10.39 percent for commercial vehicles.
Everest Bank has offered 9.55 percent auto loan for four-wheelers and 10.55 percent for two-wheelers. In Sanima, Rastriya Banijya Bank has offered auto loans at 9.99 percent and 9.32 percent respectively.
According to a recent directive issued by the National Bank of Nepal, Class A commercial banks will be allowed to charge a service charge of up to 0.75 percent. Due to which, banks will no longer be allowed to levy invisible cost in the name of service charge.
Development banks have also been aggressive in auto loans. Muktinath, the largest development bank in Nepal, has stated that atoll can be given at its wes rate i.e. 9.98 interest rate. Similarly, Kamana Seva Vikas Bank has offered atoll at 10.75 percent.
The Atoll product launched by Standard Chartered Bank has been widely adopted by all banks and finance companies. Since the default rate is negligible and even if the default is done, the vehicle will remain in the name of the bank and will continue to run on the road, so it will not be difficult for the banks to take out their loan.
Atoll is also a priority in the banking sector as it has to make 50 percent down payment as per the current system. Now, with the outbreak of Covid 19, liquidity in the banking sector is increasing and there is competition in home and car loans.