What-is-rate-of-interest-for-car-loan

What is rate of interest for used car loan?

You can purchase the car of your dreams with the best used car loans available in India. Whether it’s a new car or a pre owned car, there are many private loan providers in India that will help you fulfill your dream. All you need to do is be eligible as per the Bank/NBFC and analyze what kind of an EMI will be manageable as per you. For this you need to understand how to find out your ideal interest rate on car loans.

How do I find out my interest rate on a used car loan?

You can use the help of a used car loan payment calculator for interest rate comparison. In this calculator you can fill in your loan requirement details and the tool will help you understand what are the ideal new or used car loan term and rates for you.

You can compare used car loan interest rate of many Banks and NBFCs like SBI, HDFC, Axis, YES Bank and many more. You can take a new or used car loan in banks up to 72 and 84 months which is 6-7 years at max.

Here are some examples of used car loans at different tenures and monthly salary. Please note that as the monthly salary keeps reducing, the interest rates would get higher and higher.

Tenure Monthly salary Loan Amount Interest Monthly EMI
3 years 30,000 3,50,000 9.99% 11,000
4 years 30,000 3,50,000 9.99% 8,800
5 years 30,000 3,50,000 9.99% 7,300
6 years 30,000 3,50,000 9.99% 6,400
7 years 30,000 3,50,000 9.99% 5,700

When you take a used car loan at 11.99% with a monthly salary of 25,000 then getting a short term loan for 3 years might be very doubtful. But getting a loan for a longer tenure will always help.

Tenure Monthly salary Loan Amount Interest Monthly EMI
3 years 25,000 3,50,000 11.99% 11,500
4 years 25,000 3,50,000 11.99% 9,000
5 years 25,000 3,50,000 11.99% 7,700
6 years 25,000 3,50,000 11.99% 6,750
7 years 25,000 3,50,000 11.99% 6,100

As the salary decreases, your chances of getting a short term new or used car loan will diminish. When you take a used car loan at 13.99% with a monthly salary of 20,000 then getting a short term loan for 3 years is practically not possible unless you have a good relationship history with the Bank. But getting a loan for a longer tenure will always help.

Tenure Monthly salary Loan Amount Interest Monthly EMI
3 years 20,000 3,50,000 13.99% 11,850
4 years 20,000 3,50,000 13.99% 9,500
5 years 20,000 3,50,000 13.99% 8,050
6 years 20,000 3,50,000 13.99% 7,150
7 years 20,000 3,50,000 13.99% 6,500

Hence, overall, Banks will prefer credit worthy candidates that have a good salary and credit score. Please maintain a good history, pay your bills on time and all will be well.

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