Car Loan Interest Rates

Apply Now    Car Loan EMI Calculator

Types of Car Loan Interest Rates

There are mainly two types of car loan interest rates:

1. Floating Interest Rate:

• Varies with changes in the bank’s repo-linked lending rate 
• May reduce or increase during the tenure
• Suitable for long-term borrowers expecting advantages due to rate cuts

2. Fixed Interest Rate:

• Constant for a fixed period (or entire tenure, if opted)
• Offers stability in EMIs
• Ideal for those who prefer predictable payments

Car Loan Interest Rates and Associated Charges

Please refer Service Charge and Fees on Loans for processing fee and other charges.

Calculate Car Loan Interest / EMI

Planning to buy your dream car? Use our Car Loan EMI Calculator to estimate your monthly repayments with ease. This tool helps you understand how much you’ll need to pay each month based on your loan amount, interest rate, and tenure. It’s a quick and reliable way to plan your finances before applying for a car loan.

The calculator uses the standard EMI formula:

EMI = [P × R × (1+R)^N] / [(1+R)^N – 1]

Where:

• P  is the principal loan amount
• R  is the monthly interest rate (annual rate divided by 12)
• N  is the loan tenure in months

By adjusting the inputs, you can compare different loan scenarios and choose the one that best fits your budget. It’s a smart step toward making informed borrowing decisions.

Car Loan Application Process

Applying for a Federal Bank Car Loan offline is easy. Just follow these steps:

1. Visit Your Nearest Branch
   Walk into any Federal Bank branch with your basic documents and loan requirements.

2. Meet a Loan Officer or your relationship manager
   Discuss your car loan needs with a bank representative who will explain your options and eligibility.

3. Submit Required Documents
   Provide identity proof, address proof, income documents, bank statements, and car quotation.

4. Fill Out Application Form
   Complete the car loan application form with accurate personal and financial details.

5. Verification & Processing
   The bank will verify your documents and assess your creditworthiness.

6. Loan Sanction & Agreement
   Upon approval, receive a sanction letter and sign the loan agreement.

7. Disbursement of Funds
   The loan amount is disbursed directly to the car dealer or as per the agreed terms.

8. Drive Home Your Dream Car
   Take delivery of your new car and enjoy the journey ahead with confidence and peace of mind.

Factors That Affect Car Loan Interest Rates

Understanding what determines your car loan interest rate can help you make smarter borrowing decisions. Here are the key factors that influence the rate you may be offered:

🔍  Credit Score
A higher credit score indicates strong repayment history and can lead to lower interest rates.

💼  Income & Employment Stability
Steady income and long-term employment improve your creditworthiness in the eyes of the lender.

🚗  Car Type & Age
New cars often attract lower interest rates compared to used or older vehicles.

📉  Loan Amount & Tenure
Larger loan amounts or longer repayment periods may affect the interest rate offered.

🧾  Debt-to-Income Ratio
A lower ratio of existing debts to income suggests better repayment capacity and can lead to better rates.

🏦  Bank’s Internal Policies
Interest rates may vary based on Federal Bank’s current lending policies and market conditions.

🤝  Relationship with the Bank
Existing customers with a good track record may be eligible for preferential rates.