Understanding Car Loan EMI
A car loan EMI is the fixed monthly installment you pay to repay your vehicle financing. The EMI covers both principal and interest, calculated using the reducing balance method.
Factors Affecting Car Loan EMI
- Loan Amount: Higher loan = Higher EMI
- Interest Rate: Ranges from 7% to 18% based on profile
- Tenure: 1-7 years typically
- Credit Score: Better score = Lower interest rate
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Money-Saving Tip
Make a higher down payment (at least 20%) to reduce your loan amount and EMI. Also, opt for the shortest tenure you can afford to minimize interest payments.
Car Loan Eligibility
- Age: 21-65 years
- Income: Minimum ₹2-3 lakhs per annum
- Employment: 1+ year in current job
- Credit Score: 700+ preferred
New Car vs Used Car Loan
| Feature | New Car Loan | Used Car Loan |
|---|---|---|
| Interest Rate | 7-12% | 12-18% |
| Max Tenure | 7 years | 5 years |
| LTV Ratio | Up to 90% | Up to 80% |
| Processing | Faster | More documentation |