HDFC Bank launches Flexi Electric Car Loan with separate finance for car and battery

Planning to buy an electric car but finding the high price and monthly EMI hard to fit into your budget? HDFC Bank's Flexi Electric Car Loan scheme could help. The bank has brought the scheme because the battery is a major cost in an electric car and customers may have to put in more money at the start.

The scheme offers loans separately for the car's body and its battery. How much lower a customer's EMI will be depends on the loan amount, the interest rate and the repayment period.

Electric cars often cost more than petrol and diesel cars. The battery is the expensive component and accounts for a large share of the vehicle's total price. As a result, the loan taken to buy the car and the monthly instalment can also rise.

Under the Flexi Electric Car Loan, the repayment period for the loan taken for the battery can be kept relatively more flexible. This is the scheme's main feature. It lets customers plan repayment according to their financial position.

Arranging separate finance for different parts, instead of taking a single loan on the entire price of the vehicle, could benefit customers. The possible advantages of the scheme are these: depending on how the loan is structured, the burden of the monthly instalment may be easier to manage. If a longer tenure is available for the battery loan, repayment may become easier. With upfront costs easier to calculate, the decision to buy an electric car may be simpler for some customers. And once the loan terms are understood, customers can choose the option that suits their income.

However, it cannot be said with certainty that a separate loan will lower the total interest paid or reduce every customer's EMI.

According to HDFC Bank, the facility is available at more than 9,700 branches across the country. Customers considering an electric car can visit the branch concerned to get details of the scheme.

Before applying for a loan, it is essential to check the interest rate, the loan ceiling, eligibility, processing fee, repayment period and other terms. Customers should also confirm through the bank's official channels whether the facility is currently available.

While buying an EV, do not decide on the EMI alone. Look also at the on-road price, insurance, charging facilities at home or the office, the battery warranty and maintenance costs. Compare an ordinary car loan with the Flexi Electric Car Loan. Check, too, the interest and other charges payable over the full loan period, besides the monthly instalment.

Overall, the scheme offers a different route to financing an electric car. But to understand the real financial benefit, the final decision should be taken only after comparing all the loan terms.