EMI = [P x R x (1+R)^N] / [(1+R)^N - 1] where P=principal, R=monthly interest rate, N=tenure in months. Rs 10 lakh @ 9.5% for 5 years = ~Rs 21,000 EMI.
Current car loan rates?+
Banks offer 7.5-10% for new cars. Government banks: SBI 8.5-9.5%, BOB 8-9%. Private: HDFC 8.75-9.75%, ICICI 8.5-9.5%. Rates depend on credit score, income, vehicle type.
Maximum loan amount?+
Banks finance 80-90% of on-road price for new cars. Premium luxury cars may get 100% financing. Max amount: Rs 50 lakh - Rs 1 crore depending on income and credit score.
Documents needed?+
Identity (Aadhaar/PAN), address proof, income proof (3 months salary slip / 2 years ITR), bank statement (6 months), employment proof, vehicle quotation, photographs.
CIBIL score requirement?+
Minimum 700 for good rates. 750+ gets best rates and fastest approval. Below 650 may need higher down payment or collateral. Check free CIBIL on cibil.com or banking apps.
Tenure - longer or shorter?+
Longer (5-7 years): lower EMI, more total interest. Shorter (2-3 years): higher EMI, less interest. Choose based on monthly income capacity. Pre-pay if possible to save interest.
Pre-payment charges?+
After 1 year: most banks allow free pre-payment. Within 1 year: 2-4% of pre-paid amount. Floating rate loans: no pre-payment charges (RBI rule). Fixed rate: charges applicable.
Down payment amount?+
Minimum 10-20% of vehicle cost. Higher down payment = lower loan = lower EMI = less interest. 30%+ down payment: better interest rate negotiation. 100% loan possible for premium cars.