Car loans are secured against the vehicle, so eligibility tends to be more generous than personal loans. Typical cap: 20-25x your net monthly income for new cars, less for used. Banks finance 80-90% of new-car on-road price (you bring 10-20% as down-payment). Rates: 8.5-12% new, 11-15% used. Tenure: 1-7 years.
When to use this
Use to: estimate how much car you can afford on your income, decide whether to buy new vs used (used car has higher rate but lower price), compare bank-financing vs dealer-financing (dealer finance often has hidden processing fees), structure a co-borrower for higher eligibility.
Frequently Asked Questions
Is car loan eligibility different for salaried vs self-employed?
Slightly. Salaried: based on net monthly salary, 2-3 years job history preferred. Self-employed: based on average monthly income from ITR (last 2 years), needs business existence proof. Rates are typically the same; documentation is more involved for self-employed.
Should I take the dealer's finance or bank finance?
Compare the all-in cost. Dealer finance often comes with cashback / discount on the car price - factor that in. Bank finance usually has a cleaner / lower-fee structure. Get pre-approved at your bank first; use that as a benchmark when the dealer offers their financing.
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