New Car Finance FAQs

Know the answers to all frequently asked questions about new car finance.

Frequently asked questions

What is a car loan?

A car loan is a type of loan specifically designed to help you purchase a four-wheeler vehicle. You can borrow money from a lender such as Bajaj Finance to purchase a car and then repay the loan amount over a convenient tenure.
Bajaj Finance offers two kinds of car loans – new car finance and used car finance – to help you meet your goal of buying a car.
If you are looking to buy a brand-new car, you can read about the features and benefits of new car finance on this page.

Alternatively, you can consider used car finance from Bajaj Finance

How do car loans work?

When you take a car loan, you are provided with funds to purchase the vehicle you like. In the case of most term loans, you are charged interest on the borrowed amount for the duration of the loan tenure. This amount and the interest component of your loan is what makes up your equated monthly instalments (EMIs). Bajaj Finance offers new car loans for convenient durations of 12 months to 96 months.
Apart from term loans, you can also choose one of two Flexi variants to make your loan more affordable. These are Flexi Term and Flexi Hybrid Loans. These can help you add a greater layer of flexibility to manage your loan.

What factors affect car loan eligibility?

Your eligibility for new car finance depends on several factors, including your credit score, income, employment history, debt-to-income ratio, and the value of the vehicle you intend to purchase.
Usually, almost anyone can apply for a new car loan – Bajaj Finance offers financing to Indian nationals between the age of 18 years to 80 years with a CIBIL Score of 720 or higher.

Learn about the eligibility criteria for new car finance

How is the interest rate determined for a car loan?

The interest rate on a car loan is influenced by various factors, such as your credit score, loan term, loan amount, and prevailing market rates. Generally, borrowers with higher credit scores and shorter loan terms tend to receive lower interest rates. Bajaj Finance offers new car finance at attractive interest rates starting 7.50% to 14% p.a.

Read about the interest rates and charges applicable on new car finance

How much can I borrow for a car loan?

The amount you can borrow depends on various factors, including your creditworthiness, income, and the lender's policies. Bajaj Finance offers new car finance ranging from Rs. 1 lakh to Rs. 10 crore. If you are looking to buy a pre-owned vehicle, you may be eligible for a used car loan of up to Rs. 77 lakh.

Apply for new car finance

How is the EMI for a new car finance calculated?

You can use our New Car Finance EMI Calculator to accurately determine your EMIs. You only need to select the loan amount, rate of interest, and tenure in order to calculate the EMI due on your new car loan.

Learn more about our new car finance

What factors influence the EMIs for a new car finance?

The following factors determine your new car finance EMIs:

  • Loan amount: The amount of the loan directly affects the monthly payments. As the loan amount increases, so will your monthly instalments.
  • Tenure: The loan tenure is the period over which the borrowed amount is repaid and is inversely related to EMIs. A longer tenure reduces the monthly instalments, whereas a shorter tenure results in higher EMIs.
  • Rate of interest: The interest rate represents the percentage that lenders charge on the borrowed amount as interest. When the interest rate is higher, it results in increased EMIs, whereas a lower interest rate leads to reduced EMIs.

What is the process for calculating new car finance interest?

You can calculate the estimated EMI amount for your desired loan using our New Car Finance EMI Calculator. The interest rate for new car finance is determined by your lender and considers factors like your credit history, loan amount, and tenure. Once you have obtained the interest rate for your loan amount and tenure, you can use the New Car Finance EMI Calculator to compute your monthly instalments. This tool assists in planning your EMIs and ensuring timely repayment.

How can you lower your new car finance EMIs?

Consider the following steps to reduce your EMIs for new car finance:

  • Choose a longer repayment tenure to distribute the loan cost and decrease your monthly instalments.
  • Maintain a good CIBIL Score to take advantage of reduced interest rates, which can lead to lower EMIs

What are the factors that determine the interest rate for new car finance?

The interest rate for a new car loan is determined by various factors, including your credit score, loan duration, loan amount, and prevailing market rates.
Typically, borrowers with higher credit scores and a track record of responsible credit usage are more likely to secure favourable interest rates. Bajaj Finance, for instance, offers new car finance with interest rates ranging from 7.50% p.a. to 14% p.a.

Read about interest rates applicable on new car finance

What is the maximum loan tenure for new car finance?

You have the freedom to choose a repayment duration that suits your needs, with options available for tenures up to 96 months.

What is the CIBIL Score required to qualify for new car loan from Bajaj Finance?

To be eligible for our new car finance, a minimum CIBIL Score of 720 or higher is required.

Check your CIBIL Score for free with India’s first Credit Pass

What is the maximum loan amount available for new car finance?

You can obtain a new car loan of up to Rs. 10 crore, which you can comfortably repay over a tenure of up to 96 months.

What are the eligibility criteria for availing new car finance?

The eligibility criteria are as follows:

  • Nationality: Indian
  • Age: 18 years to 80 years* years
  • CIBIL score: 720 or higher
  • Employment:
  • For Salaried: Minimum 1 year of experience and a minimum monthly salary of Rs. 20,000
  • For Self-Employed: Submission of ITR proof for the past 2 years is required

*The applicant’s age should be 80 years years or less at the end of the loan tenure.

What is the processing fee for a new car finance?

The processing fee for Bajaj Finance New Car Loan can go up to 2.95% of the loan amount. This is inclusive of applicable taxes.

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