• Federal Bank Car Loan Interest Rates 25 Oct 2021

    6 June 2019 – RBI reduces repo rate to 5.75% by 25 bps

    Federal Bank car loan interest rate for new cars is 9.15% p.a. (One Year MCLR being 9.15% p.a.). For used car loans, the interest rate is 14.95% p.a. (with 9.15% p.a. being the One Year MCLR). The loans come with a repayment period of up to 84 months.

    Federal Bank Car Loan

    Features New Car Loan Scheme Used Car Loan Scheme
    Interest Rates 9.15% (One Year MCLR – 9.15% p.a.) 14.95% (One Year MCLR – 9.15% p.a.)
    Foreclosure Charges Nil Nil
    Repayment Tenure Up to 84 months Up to 84 months

    Other Details

    Loan Tenure
    • For new cars – 60 months
    • For new cars (salaried individuals) - 84 months
    • For used cars – 60 months
    Applicant’s Income
    • Minimum amount – Rs.20,000
    Insurance Cover Free insurance cover up to Rs.10 lakh
    Financing Up to 100% of car’s ex-showroom price

    Factors Affecting Federal Bank Car Loan Interest Rates

    The rates of interest for car loans offered by Federal Bank are among the most affordable rates in India. The bank will determine the interest rate you are eligible for based on multiple factors, some of which have been mentioned below:

    1. Vehicle’s Age – The interest rates for used cars are typically higher than new cars. This is because the used vehicle has already been devalued. Therefore, the condition of the used vehicle plays an integral role in determining the rate of interest.
    2. Income-to-Debt Ratio – In simple terms, the more money you owe, the less likely you are to get a lower rate of interest. This is the reason why banks and financial lenders consider the income-to-debt ratio of individuals. A person with a higher income and lower debts will be at a lower risk for a money lender or bank.
    3. Credit Score – This parameter is basically used by banks and lenders to assess an individual’s debt payment history. This is the only parameter in determining interest rate that you can directly influence. A credit score of 725 or above is typically considered healthy.
    4. Loan Duration – When you are borrowing a car loan, you get to choose the amount of time in which you can pay it off. The loan tenures with respect to car loans usually are 36, 48, or 60 months. If you choose a shorter loan tenure, you will face a lower rate of interest. A longer loan tenure means having to pay higher interest rates.


    1. How do I calculate the EMI of my car loan?
    2. You can compute the total EMI you have to pay on the official website of Federal Bank by clicking on https://www.federalbank.co.in/emi-calculator. You can also use Bankbazaar’s EMI calculator by clicking on /finance-tools/emi-calculator.html.

    3. What should the age of the used car be in case of used car loans?
    4. The vehicle’s age should not exceed 3 years.

    5. How is the depreciation value computed with respect to used cars?
    6. It is calculated using Straight Line Method at 15% for the first year. Thereafter, for the subsequent years, it is calculated at 10%.

    7. What are the documents that resident salaried individuals are required to submit?
    8. A resident salaried individual will be required to submit the following documents:

      • Pay slips for the preceding 3 months
      • Form 16 or IT return copies for the preceding 2 years
      • Bank account statement for the last six months
    9. Do I have to submit any age proof while availing the car loan?
    10. Yes. You will be required to submit any one of the following age proofs:

      • Birth certificate
      • Passport
      • Driving license
      • AISSE or SSLC certificate

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