Electric vehicles (EVs) have low running and maintenance costs; however, they come with a breakthrough price. On average, electric vehicles are 50% more expensive than their internal combustion engine (ICE), i.e. their petrol and diesel siblings. Although government subsidies on electric vehicles reduce the cost a bit, they still don’t make them as affordable as ICE vehicles. To make things easier for EV buyers, several financial institutions such as banks have announced loans at special interest rates. Additionally, loans on electric vehicles, including cars and bicycles, come with added benefits such as tax deductions, not typically found in other auto loans. Below is a list of banks offering loans with special interest rates on electric vehicles.
What are special interest vehicle purchase loans?
In order to promote and encourage the purchase of electric vehicles, several banks and financial institutions offer preferential interest rates to potential buyers of electric cars and two-wheelers. These prices are comparatively lower than ICE vehicles, which means that at the end of the loan term, buyers can save tons of money.
Banks offering loans on electric vehicles
Here are the banks that offer loans with special interest rates on the purchase of electric vehicles.
SBI EV loan
Known as the SBI Green Car Loan, the public bank offers subsidized interest rates on four- and two-wheeled electric vehicles. Launched as the first dedicated EV loan program in India, the SBI Green claims to provide loans that are 20 basis points, 0.2% less than current vehicle-related loan programs available in the market. .
SBI Green Loan Eligibility and Quantum
A candidate must be aged 21 to 67 and have an annual income of 3 lakhs to 4 lakhs per year to be eligible for the SBI EV loan. In addition, the repayment term of the loan is either 3 years or 8 years, whichever a candidate is comfortable with. The interest rate on SBI Green loans, which will be between 7.15% and 7.50% per annum, is calculated on a quantum basis. The total amount financed by this program will be 90% of the road price of an electric car and even 100% on some models. The loan does not cover electric bikes.
How to Apply for SBI Green Loan
Here is how you can apply for an SBI green loan from the SBI website itself.
- Go to the official portal of SBI for the green loan. Alternatively, you can click this link.
- Then scroll down the page and you’ll find “Green Car Loan: For Electric Cars” among the options. Click the “Apply Now” button.
- You will now be redirected to the SBI auto loan webpage
- Depending on whether you already have an SBI bank account or not, complete the necessary form by entering all the information requested.
- Once completed, submit the form and in due time you will receive a response from SBI regarding your electric car loan application.
Axis bank EV loan
Third private sector bank in India, Axis has also developed loans dedicated to the purchase of electric vehicles. The loans offer a 50 basis point lower concession than other auto loans with up to 80-85% of the value financed on the road price of the car.
Axis Bank Electric Car Loan Eligibility and Amount
The eligibility criteria for availing an EV loan from Axis bank is that a person must be salaried, self-employed or running a business as a partnership, limited liability company, Hindu undivided family or trust and corporations. That said, an employee can benefit from 80% of the value of the new electric car Thanks to this loan, the self-employed can benefit from up to 85% of the total value when buying a new car. The term of the loan in this scheme is 7 years with an interest rate of 7.35% for 1 year. But note that this rate is for loans up to 36 months and may vary beyond that. In addition, Axis bank charges between Rs 3,500 to Rs 5,500 as a processing fee when availing the loan amount.
How to apply for an Axis New Car loan
Here is how you can apply for an Axis New Car loan on the SBI website itself.
- Go to the official Axis bank auto loan portal. Alternatively, you can click this link.
- Click the “Apply Now” button.
- You will now be redirected to a login page. If you already have an Axis bank account, you can log in with your debit card. Otherwise, enter your date of birth and mobile number to receive an OTP.
- Once you receive an OTP via SMS, enter it and you will be in.
- Fill in necessary details such as car model number, income details, contact details etc.
- Once done, submit the form and wait for a response from Axis bank regarding your EV car loan application.
Union Bank EV Loan
Union Bank of India is a government-owned bank that also offered a specific loan for electric vehicles called Union Green Miles. This loan is available for four wheelers and two wheelers across India with a interest rate of 7.40% and 9.90% respectively. This interest rate may vary depending on the CIBIL score of the applicant. In addition, the Green Miles loan offers 20 basis point concession over other auto loan programs on the market.
Eligibility and Quantum of Union Green Miles
In order to qualify for a loan of Union Green miles, the the candidate must be between the ages of 18 and 75. In addition to one applicant, there can also be two other co-applicants to jointly apply for the loan. The maximum loan amount that can be financed through this program for two-wheeler is Rs 10 lakh and for four-wheelers there is no limit, that is, even 100% of the total purchase value can be financed with this loan. Similarly, the loan period for two-wheelers is 36 months while for four-wheelers it is 84 months. Also, if a subsidy on electric vehicles is provided by the central or state government, that particular amount can be deducted from the total loan amount.
How to Apply for a Green Miles Loan
The Green Miles loan can be applied for online. Here’s how.
- Access the Union Bank car loan application window. Alternatively, you can click here.
- Scroll down the page to find the “Apply Online” button. Click on it.
- Then you will be redirected to the online loan portal. Select the ‘vehicle loan’ option.
- Now fill out the form with all the necessary details.
- When you’re done, click “save” and your loan application will be sent for processing
Is there a tax exemption on EV loans?
To promote the purchase of electric vehicles in the country, a person purchasing a four or two-wheeled electric vehicle can claim a deduction of up to 1.50,000 rupees under Section 80EEB when repaying the loan. This applies to electric vehicles used for both business and personal use.
What subsidies do you get with electric vehicles?
With the government realizing the importance of electric vehicles and the benefits they bring to the environment, several state governments have started offering subsidies and incentives for the purchase of electric vehicles. these state subsidies apply to both two-wheelers and four-wheelers with varying benefits. For example, some states require no road tax registration while in some states the subsidy takes the form of a reduction in the price of the vehicle based on its battery capacity.