Banking Khabar / People planning to buy vehicles on installment now have a major advantage as loan interest rates continue to drop month by month, making borrowing cheaper than ever.
According to Nepal Rastra Bank, the average base rate of commercial banks have fallen to around 5.12%, bringing lending rates down to historic lows. Just three years ago loan interest rates had reached as high as 15-16%, but they have now dropped to around 7% on average.
Customers can even secure loans at 5.5% to 6% interest from banks with lower base rates, especially if they negotiate well. Banks typically adds up to a 5% premium on a base rate, but due to excess liquidity in the banking system, some borrowers are managing to get loans with as little as 0.5% to 1% premium.
Banks are also offering fixed-rate auto loans at competitive rates, ranging from 7% to 9 -10% with repayment periods of 5 to 7 years.
Lower interest rates means lower costs for borrowers, monthly payments are reduced, making vehicle ownership more affordable.
Some Banks Even Offer Cheaper Loans
Out of 20 commercial banks, 5 now have base rates below 5%.
- Rastriya Banijya Bank – 4.36%
- Standard Chartered Bank Nepal – 4.52%
- Everest Bank – 4.73%
- Nabil Bank – 4.91%
- Nepal Bank – 4.98%
Borrowers may access loans from these banks at around 5.5% or slightly higher, depending on negotiation. However, Standard Chartered is currently not issuing auto loans.
Several Other Banks, including Agricultural Development Bank, Global IME, Nepal Investment Megha Bank, Sanima, Prabhu, NMB, and Machhapuchchhre Bank, have base rates between 5% and 5.5%, offering loans around 6% to 6.5%.
Meanwhile, banks like Laxmi Sunrise, Nepal SBI, Siddhartha, Kumari, Citizens, Himalayan, and Prime Commercial have base rates between 5.5% and 6%, with auto loan rates typically around 7% to 7.5%.
Among all, NIC Asia Bank has the highest base rate at 6.41%, making its loans relatively more expensive.
With interest rates at record lows, this is one of the best times in recent years to take out a vehicle loan in Nepal, especially for buyers looking to reduce long-term borrowing costs.
