No More 0% Auto Loans

Due to the number of auto loans that have been offered to those who really cannot afford the car and are now defaulting on their auto loans, the banks of India are reconsidering who they are lending money to. In fact, many of them are now no longer offering low or no interest financing in an attempt to weed out some of the less stable.

Some companies are not offering auto loans at all, especially when it comes to the two-wheeler industry. GE Money has already pulled out, and several others are considering their options. Bajaj Auto, TVS Motors and Yamaha India have already been told by their banks and financial institutions that they cannot offer lower interest rate schemes for the upcoming seasons as they will not finance the car loans.

ICICI Bank and HDFC Bank have already started reducing their exposure as well, as they don’t want to get involved in auto loans that are not being paid. They are now looking into joining into a delinquency fund with other banks and financial institutions that are also trying to insure the safety of their auto loans.

They say that auto loans are not a charitable business, and if people cannot pay then they cannot ride. They say that they are going to only finance those auto loans that seem to be able to be paid not those that might be on shaky ground. In addition, many of these are being sold without valid registration, which means they are having an even harder time of getting people to pay.


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