Car Loan

A car loan lets you purchase a new or used vehicle by borrowing funds from banks, NBFCs, or other financial institutions. Loans typically cover a large portion of the car’s price, with repayment terms and interest rates based on your profile and lender policies.

Key Features:

• Loan Amount: Up to 100% of the car’s on-road price (subject to eligibility)
• Interest Rates: Starting as low as 8.5% per annum for new cars, depending on credit score, car type, and tenure
• Loan Tenure: Typically 1–7 years, with longer tenures reducing monthly EMIs but increasing total interest

Eligibility Criteria:

• Age: 18–75 years
• Income: Minimum monthly income required (e.g., ₹25,000 for salaried individuals)
• Employment History: Stable employment or business history (usually ≥1 year)

Documents Required:

• Identity Proof: Aadhaar, Passport, or Driver’s License
• Address Proof: Utility bills, Passport, or Rental Agreement
• Income Proof: Salary slips, bank statements, or ITR
• Employment Proof: Employment ID or business proof

Things to Consider:

• Credit Score: Higher score improves approval chances and lowers interest rates
• Down Payment: Reduces loan amount and shows financial responsibility
• Loan Terms: Review tenure, interest type (fixed/floating), and fees to ensure affordability

Recent Developments:

As of February 2025, the central bank reduced the benchmark interest rate to 6.25%, potentially leading to lower car loan rates for borrowers.

Conclusion:

Car loans provide an accessible way to finance your vehicle, whether new or used. Compare offers, understand terms, and evaluate repayment capacity to make the most of your loan.