Hitch a ride on a fixed-rate car loan and shield yourself from another hike

But lenders can impose restrictive conditions on prepayment and foreclosure

Interest rates on car loans have moved up after the 90-basis point (bp) increase in repo rate by the Reserve Bank of India (RBI) over the past two months. Borrowers should lock into a fixed-rate car loan now before rates inch up further.  

Fixed and floating options available

Both fixed- and floating-rate options are available.

“Most public-sector banks offer car loans at floating interest rates, while most private-sector lenders offer fixed rates. A few lenders offer both,” says Sahil Arora, senior director, PaisaBazaar.

Experts say a fixed-rate loan makes more sense in the current scenario.

“Interest rates are expected to