Any finance availed for the purchase of buying a brand new or a used car is defined as Car Loan. Car loan, also known as Vehicle Loan or Car Finance is one the most complex loan product in India because the car dealers tend to mix together various cash discounts offered by the manufacturers or car financiers in the interest rate offered to the buyer. Due to such things, the chances are that the borrower may not get the best deal on car loan.

The interest rate offered by the lenders on car loans in India may actually vary from the one advertised either in the newspaper or any other media. Unlike other loan products, the interest rate for auto loan  varies highly depending on various factors like credit score of the borrower, make and the age of the car and quantum of car loan sought by the borrower.

The credit history of a person gives brief information about the borrowers?? past history of repayments on credit cards  or any other loan. A past default or delay in payment may point to a probable risk to the lender, thereby increasing the rate of interest offered to borrower on car loan.Since car loans based on the cars have different interest rates, it is advisable to decide on the model and make of a car. Loans for Used car or second hand car carry a higher rate of interest as compared to new car loans.

The borrower should decide on the quantum of loan required before he finalizes on car loan lender. The quantum of loan will depend on the make of the car, the amount of loan lender is willing to finance and the car loan tenure. Once the amount of funding required is finalized for the vehicle loan, borrower should compare the best deals available from various lenders. The borrower should freeze on the lowest EMI offered for the same loan amount and same tenure. Once that is done, you can negotiate with different lenders for the best deal.


1. Age.
2. Net Income requirement.
3. Employment:Type stability.
4. Type of car.
5. Value of car.
6. Residence:Area stability.