The interest rate fixed on a car loan is subject to several factors. It will vary for each borrower based on their credit profile and income. Generally, the interest rate on a car loan ranges between 8% to 17%. If you are looking for a car loan with a particular lender, you must analyse the following factors as they have significant influence on your borrowing and interest rate.
Credit Score: A greater credit score is considered a low risk profile for the banks. Henceforth, the lender will be able to provide you a car loan at lower interest rate.
Income: If you have higher monthly income, you are likely to qualify for a low interest loan.
Relationship with the lender: If you already have a loan or have savings or salary account, or have a credit card, you are likely to get a favourable interest rate on your car loan.
Employer: If you are working for a company that is listed by the bank, you are likely to get a low interest car loan.
Ensure that you have good eligibility for the car loan and apply for it. Check your credit score frequently to know where you stand with regard to your credit status.