Federal Bank Car Loan Interest Rates

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:

• 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.
• 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.
• 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.
• 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.

A good credit score can help you secure lower interest rates on loans and credit cards.

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