Purchasing a car in today’s economic landscape is tough as most people don’t have the funds to pay the total amount upfront. This is why many people avail the facility of car loans, so they can buy it in monthly instalments. Graana.com shares a detailed guide on interest rates on car loans in Pakistan below, to help you better understand the process and give you an overview of the payments you would be required to make on a monthly basis each year.
If you’re buying a new or used car, you should take a look at the interest rates on car loans offered by different banks in Pakistan to consider your options. First, however, you need to be familiar with KIBOR (Karachi Interbank Offered Rate). This is the daily reference rate that is offered by a bank that is lending to another bank in the Karachi interbank money market. It is applied to the type of financing facility that you’re using.
Following are the different types of car loans in Pakistan that are offered by various major banks.
HBL is one of the largest commercial banks in the country, with a presence in different parts of the world as well. This leading bank offers various facilities such as home loans, car loans and personal loans to clients. Many customers opt for its car loan facility as it is a flexible and hassle-free way to purchase a new or used car. Some of its features are listed below.
There are different eligibility criteria for salaried individuals, pensioners and business professionals.
In order to apply for this auto loan, just visit the nearest HBL branch with the necessary documents. Following are the documents that are required by both salaried and business professionals.
HBL only offers the fixed car loan facility to its customers, which means the interest rate remains the same throughout the tenure of the loan facility. Currently, the interest rate on car loans in Pakistan is around 15%. HBL has a car loan calculator on their website as well, through which you can calculate the monthly instalments you have to pay to the bank.
Bank Alfalah is one of the leading banks in Pakistan, with operations set up all across the country. They offer several lending facilities, which include car loans and home loan facilities. By availing this, you can purchase a locally assembled/manufactured new or used car. It has a flexible loan facility with a minimum tenure of 2 years and maximum tenure of 5 years. In order to apply for the loan, you have to meet certain requirements set by the bank.
The following are the requirements set by Bank Alfalah for salaried and self-employed individuals.
To apply for this loan facility, you have to visit the nearest Bank Alfalah branch with the required documents, which include:
Following are the markup rates on different types of vehicles.
Financing Product on Variable Rates (only for locally assembled/manufactured vehicles) | 2 Years | 3 Years | 4 – 5 Years | 6 – 7 Years (only for vehicles up to 1000 CC) |
Brand New Vehicles | 1 Year KIBOR + 3.50% | 1 Year KIBOR + 4.00% | 1 Year KIBOR + 4.50% | 1 Year KIBOR + 5.00% |
Used Vehicles | 1 Year KIBOR + 5.00% | 1 Year KIBOR + 5.00% | 1 Year KIBOR + 5.00% | 1 Year KIBOR + 5.00% |
Brand New Semi Commercial Vehicles | 1 Year KIBOR + 5.00% | 1 Year KIBOR + 5.00% | 1 Year KIBOR + 5.00% | (NA) |
If you’re applying through the fixed rate facility, then the following table lists the complete markup rate that you have to pay throughout the loan tenure.
Financing Product on Fixed Rates | 1 Year | 2 Years | 3 Years | 4 Years | 5 Years | 6 Years | 7 Years |
Auto Loan for Brand New Vehicles | 16.00% | 16.00% | 16.00% | 16.50% | 16.50% | 16.50% | 16.50% |
Auto Loan for Brand New Imported Vehicles | 16.50% | 16.50% | 16.50% | 16.50% | 16.50% | (NA) | (NA) |
Brand New Semi Corn. Vehicles (Local Make) | 17.00% | 17.00% | 17.00% | 17.00% | 17.00% | (NA) | (NA) |
Second Hand Vehicles | 17.50% | 17.50% | 17.50% | 17.50% | 17.50% | (NA) | (NA) |
Allied Bank is another commercial bank that offers car loans to customers on low markup rates with easy repayment options. This financing facility is available for all Pakistani cardholders with a repayment period of up to 7 years. Through this auto loan facility, you can get financing of up to Rs. 6 million. In order to avail it, you are required to visit any branch near you and submit the following documents.
Allied Bank Limited is offering this facility at low markup rates of up to 1 year KIBOR + 4%. It should be noted that the interest rate on car loans tends to vary with any changes in the policy rate from the State Bank of Pakistan.
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