6 June 2019 – RBI brings down the repo rate by 25 basis points to 5.75%
Jammu and Kashmir Bank Car Loan interest rate for fresh loans ranges from 9.6% to 10.35%. For used car loans, the interest rate ranges between 12.1% and 13.1%.
|Features||New Car Loan||Used Car Loan|
|Loan tenure||Up to 7 years||Up to 6 years|
|Processing fee||0.5% of loan amount||-|
|Loan amount||Up to Rs.50 lakh||Up to Rs.15 lakh|
|Type of Interest Rate||Effective Rate of Interest|
Fixed Rate of Interest
Floating Rate of Interest
Floating Base Rate + 1.00% p.a.
Monthly rests are offered in both cases. However, the rates of interest are subject to change as per the direction of the A&AP Division of the Corporate Headquarters.
Interest rates for a J&K Bank car loan might be decided based on various factors and also on the customer’s profile. Some of the key factors which might affect the rates are as follows -
Debt-to-Income Ratio - Banks decide the interest rate also depending on the number of debts carried by the customer. The lender will also look into the previous debt repayments and card payments done by the applicant to zero in on an affordable interest rate. If the debt-to-income ratio is high, then the bank will mostly offer a higher interest rate to the customer.
Income - The income of an applicant plays a major role in determining the interest rate. The bank requires that applicants’ take-home incomes should be sufficient to easily repay the loan. Having a steady income with the good financial planning always ensures that customers get the best interest rates on their car loans. Additionally, having a co-applicant also improves the income criteria, enabling the applicant to get lower interest rates.
Loan Tenure - The loan tenure opted by the borrower also helps determine the interest rate offered by the lending institution. Longer tenures require the customer to pay higher interest rates, which also increase the risk factor. A shorter loan tenure with smaller loan amounts also gets customers the best interest rates, as long as the down payment made by the applicant is quite high.
Down Payment - Individuals are always advised to make a higher down payment towards their car loans to make sure that the loan amount availed is also lesser. When the down payment amount is high, banks get the confidence that the applicant has planned his finances well and is capable to repaying the car loan comfortably. The interest rate offered will also be quite low, which will profit the customer at the end of the loan tenure.
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