Electric vehicles (EVs) do have low running and maintenance costs; however, they come with a wallet-breaking price. On average, EVs are 50 percent more expensive than their Internal Combustion Engine (ICE) aka petrol and diesel-run siblings. While subsidies on EVs by the government do bring the cost down a little, they still don’t make them as affordable as the ICE vehicles. To ease things for EV buyers, several financial institutions such as banks have announced loans at special interest rates. What’s more, loans on electric vehicles, including cars and bikes, come with added benefits such as tax deductions, which are generally not found in other auto loans. Below is a list of banks offering loans with special interest rates on electric vehicles.
What are special interest rate loans on the purchase of vehicles?
In order to promote and encourage the purchase of electric vehicles, several banks and financial institutions offer special rates of interest to potential electric car and two-wheeler buyers. These rates are comparatively less than that of ICE-run vehicles, which means at the end of the loan tenure buyers can save up tons of money.
Banks offering loans on electric vehicles
Following are the banks that offer loans with special interest rates on the purchase of electric vehicles.
SBI EV loan
Known as SBI Green Car Loan, the state-owned bank offers subsidised interest rates on both four-wheeler and two-wheeler electric vehicles. Launched as the first loan program dedicated to EVs in India, the SBI Green claims to provide loans that are 20 basis points i.e. 0.2 percent lower than the current loan schemes related to vehicles available in the market.
SBI Green loans eligibility and quantum
An applicant should be aged between 21 to 67 years and have an annual income of 3 lakhs to 4 lakhs annually to be eligible for the SBI EV loan. Furthermore, the loan repayment period is either 3 years or 8 years, whichever an applicant is comfortable with. The rate of interest on the SBI Green loans, which will be between 7.15 percent to 7.50 percent per annum, is calculated based on the quantum. The total amount financed through this scheme will be 90 percent of the on-road price of an electric car and even 100 percent on select models. The loan doesn’t cover electric bikes.
How to apply for SBI Green loan
Here’s how you can apply for SBI Green loan from SBI’s website itself.
- Head over to SBI’s official portal for Green loan. Alternatively, you can click on this link.
- Then scroll down through the page and there you’ll find ‘Green Car Loan: For Electric Cars’ among the options. Click ‘Apply Now’ button.
- Now you’ll be redirected to SBI’s auto loan web page
- Depending on whether you’re an existing SBI bank account holder or not, fill in the necessary form by entering all the details being asked.
- When done, submit the form and in due time you’ll receive a response from SBI regarding your electric car loan application.
Axis bank EV loan
India’s third-largest private sector bank, Axis has also come up with loans dedicated to the purpose of purchasing electric vehicles. The loans provide 50 basis points lower concession than other car loans with up to 80 to 85 percent of financed value on the on-road price of the car.
Axis Bank electric car loan eligibility and quantum
The eligibility criteria to avail a Axis bank EV loan is that a person should either be salaried, self-employed or be running a company as a partnership firm, limited liability partnership, Hindu Undivided Family or trust & societies. That said, a salaried individual can avail 80 percent of the value of the new electric car through this loan and similarly self-employed individuals can avail up to 85 percent of the total value when purchasing a new car. The loan tenure in this scheme is 7 years with an interest rate of 7.35 percent for 1 year. But do note that this rate is for loans up to 36 months and may vary beyond that. Furthermore, Axis bank charges Rs 3,500 to Rs 5,500 as a processing fee when availing of the loan amount.
How to apply for Axis New Car loan
Here’s how you can apply for a Axis New Car loan from SBI’s website itself.
- Go to Axis bank’s official car loan portal. Alternatively, you can click this link.
- Click on ‘Apply Now’ button.
- Now you’ll be redirected to a login page. If you’re an existing Axis bank account holder you can login with your debit card. If not, enter your date of birth and mobile number to receive an OTP.
- Once you receive an OTP via SMS enter it and you’ll be in.
- Fill in the necessary details such as car model no., 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 has also come up with an electric vehicle-specific loan called Union Green Miles. This loan is available for both four-wheelers and two-wheelers across India with an interest rate of 7.40 percent and 9.90 percent respectively. This rate of interest may vary depending on the CIBIL score of the applicant. Additionally, the Green Miles loan offers 20 basis points concession over other car loan schemes in the market.
Union Green miles eligibility and quantum
In order to avail a Union Green miles loan, the applicant should be aged between 18 to 75 years. Along with an applicant, there can be two other co-applicants as well to jointly apply for the loan. The maximum loan amount that can be financed through this program for two-wheelers is Rs 10 lakh and for four-wheelers there’s no limit, meaning even 100 percent of the total purchase value can be financed through this loan. Similarly, the loan tenure for two-wheelers is 36 months while for four-wheelers its 84 months. Additionally, if a subsidy on EVs is provided by the central or state government, that particular amount can be deducted from the total loan amount.
How to apply for Green Miles loan
Green Miles loan can be applied online. Here’s how.
- Go to Union Bank’s car loan application window. Alternatively, you can click here.
- Scroll down through the page to find the ‘apply online’ button. Click on it.
- Next you’ll be redirected online loan portal. Select the ‘vehicle loan’ option.
- Now fill in the form with all the necessary details.
- When done, hit ‘save’ and your loan application will be sent for processing
Is there a tax exemption on EV loans?
In order to promote the purchase of EVs in the country, individual purchasing an electric four-wheeler or two-wheeler can claim a deduction of up to Rs 1,50,000 under section 80EEB when paying off the loan. This is applicable to electric vehicles being 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 these bring in for the environment, several state governments have started providing subsidies and incentives on the purchase of EVs. These state-wise subsidies are for both two-wheelers and fours wheelers with varying benefits. For instance, some states require no registration for road tax while in some states the subsidy comes in the form of a reduction in vehicle price based on its battery capacity.