Car Loan

The Reserve Bank of India (RBI) increased the benchmark lending rate or repo rate by 25 basis points to 6.50 % on February 8th 2023 to strengthen the fight against inflation. The repo rate is the rate at which the central bank lends money to commercial banks. This decision to hike the repo rate will lead to an increase in the EMIs on home loans and other borrowings.

EMIs are small monthly installments that have to be paid by the borrower while repayment of the loan. EMIs are decided on the loan amount, tenure of the loan and the interest rate that is applicable. For a 3 lakh car loan, the EMI will vary with the interest rate and the loan tenure.

Buying a new car is an expensive option. The costs associated with buying a new car are a lot of taxes and other charges apart from the charges that are levied by the lending agency or bank. The charges include road taxes, registration of the vehicle and the permits that are required for every state.

A credit score of 680 is considered fair. It is not bad but still makes lenders tread with caution with your car loan application. A 680 generally indicates that your credit history is good, but you have not had enough credit history, which makes your credit score lower.

Yes. 697 is a great credit score and a healthy CIBIL™ score, but you can get a better score with a higher credit score. CIBIL™ scores are based on a scale of 300-900.

The EMI for a car loan broadly depends on the period of the loan, interest rate, and the principal amount. So, the EMI will vary with the rate of interest and the loan tenure.

The EMI for a 10 Lakh car loan will vary with the interest rate and the tenure of the loan. For example: For a loan tenure of 5 years and an interest rate of 7%, the EMI for a 10 Lakh car loan will be Rs. 1,980 per month.

It does sound like a good idea. Are pre-approved car loans a good deal? Should you check your loan eligibility before visiting the car dealership?

Pre-approved loans are just marketing tactics used by banks and lenders to get your attention. These pre-approved offers are given based on the information they have in their database. Hence, it may not include the complete picture. 

You can get a car loan even though your credit score is lower than 650. It's not impossible, but it's a little disadvantageous for you. It's up to the bank's discretion to lend you the money. However, you might get unfavourable conditions with respect to the interest rates and other loan benefits in a car loan with such a low credit score.

Car loans are usually given at 85% of the car value and your repayment capacity will also be checked to decide on the loan amount that you’ll be able to get. It is advised to customers that they restrict their car loans to not more than 20 percent of their monthly income. For example, if you make Rs. 40,000 per month, your monthly car loan EMI should not exceed Rs. 8,000.

EMIs on cars are calculated by using factors like the loan amount borrowed, the interest rate and tenure. With the help of a Car Loan EMI calculator, you will be able to know the approximate EMI that will be applicable for you. The EMI consists of the principal and the interest charged. Thus the EMI to be paid will include both the principal amount and the interest applicable.

SBI Bank provides auto loans at fixed interest rates under the schemes SBI Car Loan, NRI Car Loan, Assured Car Loan Scheme at interest rates from 8.00% to 8.70%. Under the Loyalty Car Loan Scheme, the SBI Car Loan and NRI Car Loan scheme provide loans at interest rates from 7.95% to 8.65% (CIC rates are applicable). Certified pre-owned car loan schemes(Loyalty Car Loan Scheme) at interest rates of 9.50% for man and 9.45% for women. The normal Certified pre-owned car loan schemes provide interest rates from 9.75% to 10.75% (CIC Based rates are applicable).

Your car loan amount depends on your monthly income and the type of car you wish to purchase.  Before approving your car loan application, the lender goes through your credit report to analyse how you have performed in the past with your credit activities. If you have a good credit history, chances are higher that your loan application will get approved. 

The interest rate fixed on a car loan is subject to several factors. It will vary for each borrower based on their credit profile and income. Generally, the interest rate on a car loan ranges between 8% to 17%. If you are looking for a car loan with a particular lender, you must analyse the following factors as they have significant influence on your borrowing and interest rate. 

Every lender has a set of eligibility criteria to become eligible for a car loan. If you are looking for a car loan, you can easily get it by checking your eligibility criteria with the lender. Below are the criteria to get a car loan successfully. 

Most of the banks let you calculate your eligibility for a car loan on their website with the help of a car loan eligibility calculator. Most banks offer up to 100% of financing for new cars while you can get 80% for pre-owned vehicles. However, this hugely depends on the borrower’s credit profile. 

Owning a car has become much easier with the varied financing options available from banks and private lenders. With a salary of Rs. 20,000 per month, you must be wondering how much you will be able to get as the maximum car loan amount. Banks, typically, consider your income, credit score, employment and employer as the major criteria to offer a car loan. 

Buying a bike with EMI paid from either a credit card or with a two-wheeler loan provided by a bank or an NBFC (Non-Banking Financial Company) will have its own sets of advantages and disadvantages. You can pick which is better based on your personal requirements.

Yes, it is very advisable to pay off your car loan with the lender you have borrowed from. This is because if you have an unsettled car loan or any other loan, it will cause your credit score to reduce very drastically.

In general, the interest rates for car loans begin at around 9% and can go up to 16% or more based on the customer’s credit profile and other factors.