A car is not a luxury anymore rather it has become a necessity for the daily commute. Life without a personal vehicle is quite frustrating as metro or a bus can’t take you everywhere. Also, hiring a cab has become quite expensive as cab companies keep hiking the fares. A Bike is also an alternative to public transport, but it isn’t comfortable. Also, a bike is not suitable for a large family. In contrast to this, a car is much more comfortable and suits even a big family.
But buying a car requires hefty paycheck which obviously everybody doesn’t have. Not everybody has a high paying job! For the ones that have an average salary, buying a car by paying full cash is a dream that can take many years to complete. This fact is enough to break hearts for those who want to buy a car but does not have enough cash. But the good news is that you can take used car loan that would help you to fulfill your dream of owning a car. You can get a car loan not only for a new car but also for a used car loan. There are many banks and NBFC’s units that are willing to give an individual a car loan if they fulfill the eligibility criteria of a car loan.
If you are planning to buy a used car you can apply for a car loan.
No more one has to stand in a queue in banks to get loan approvals as one can get check car loan eligibility online. It is worth to remember that you should check eligibility conditions before you apply for a car loan. Before you apply for a car loan, you must check for some eligibility criteria that NBFC would consider before giving you a loan.
Some of the eligibility conditions for the car loan are
- The individual must be between 21 years at the time of loan approval to 60 years at the end of the loan tenure.
- In case of employment, an individual must be employed for at least 1 years.
- The individual must have a good credit score. A credit score of 750 and above is considered a good score.
A credit score forms an important part of car loan eligibility. But what is a credit score?
The credit score of a person is defined as the loan repayment ability. A credit score is given in the range of 0 to 900. A high credit score is achieved if an individual pays EMI’s on time and does not default on loan repayment.
A high credit score helps to get a low rate of interest on a car loan. The used car loan interest rate has a lot of benefits as you can save a lot of money.
However, before you apply for a car loan, you should compare the rate of interest offered by different lenders in India. Droom Credit offers an interest rate of 9.60% on used cars which is quite cheap when compared to other banks and NBFC’s.
The rate of interest plays a big factor in determining the EMI of your car loan. EMI or equated monthly installments is the general mode of repayment of loans that lasts until the end of the loan tenure. The EMI’s are fixed installments that the borrower needs to pay to the lender as per the term and conditions of the loan.
The loan tenure and the EMI are related inversely. Generally, the longer the tenure is, the lower the EMI. On the other hand, short loan tenure results in a high EMI. The maximum loan tenure for a car loan offered in India is usually 7 years.
If you are looking for a cheap used car loan, then you can apply for car loan online. You can visit the Droom Credit or dial the toll-free number for further inquiry.
Droom
Droom is an automobile e-commerce platform offering a 21st-century automotive buying experience online with its four value pillars including trust, selection, low price, and convenience second to none. It offers 250k+ vehicles online in 1,100 cities — both used and new. Droom deals in buying and selling cars, 2-wheelers, and other vehicles too. It is an AI and data science-driven platform designed with the best ecosystem tools. Here, we have a team of auto-experts and auto enthusiasts who are dedicated to covering every sphere of the auto industry by simplifying the procedure of buying and selling with Unified Droom Experience. To know more, click here.
FAQs
Most used auto loans go to borrowers with minimum credit scores of at least 675. For new auto loans, most borrowers have scores of around 730. The minimum credit score needed for a new car may be around 600, but those with excellent credit often get lower rates and lower monthly payments.
What is the minimum credit score for car finance? ›
There is no minimum credit score required to be approved for car finance for a number of reasons: – Different finance providers will use different third-party credit reference agencies to retrieve your credit score. A person's credit score will be different across providers as their scoring systems are unique.
Can you get a used car loan with a 600 credit score? ›
In general, you'll need a FICO credit score of at least 600 to qualify for a traditional auto loan, but the minimum credit score required with vary from lender to lender. As interest rates increase due to inflation, securing a subprime auto loan may be more difficult — but not impossible.
Can I get a car loan with a credit score of 500? ›
It's possible to get a car loan with a credit score of 500, but it'll cost you. People with credit scores of 500 or lower received an average rate of 14.08% for new-car loans and 21.32% for used-car loans in the first quarter of 2023, according to the Experian State of the Automotive Finance Market report.
What credit score do you need to buy a $30000 car? ›
The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.
Can I get a car loan with a 550 credit score? ›
While you technically can get approved for a loan with a 550 credit score, you'll likely face more challenges and pay significantly more for the loan than if your score was higher. Most lenders won't consider borrowers with scores less than 580 – but you may still be able to find one if you know where to look.
What credit score do I need to buy a $20000 car? ›
There isn't one specific score that's required to buy a car because lenders have different standards. However, the vast majority of borrowers have scores of 661 or higher.
Can I finance a car with a 480 credit score? ›
It's possible to get approved for an auto loan if you have bad credit (sometimes called "deep subprime" credit), meaning a credit score under 580. But in many cases, options can be costly. To improve your odds of getting approved for a relatively affordable loan, follow these steps.
Is Carvana easy to get approved? ›
99% of customers who apply get approved and your terms are good for 30 days. There's no impact to your credit and you can see your actual down payment and monthly payment on all vehicles in our inventory.
What is the easiest car company to get financing? ›
The best car loans for bad credit
- Best for shopping around: myAutoloan.
- Best for buying a car online: Carvana.
- Best from a big bank: Capital One Auto Finance.
- Best for used vehicle selection: CarMax Auto Finance.
- Best for refinancing: Autopay.
The base FICO score is also called FICO Score 8 or 9. It's not designed specifically for auto loans, but many lenders use it. It's a number between 300 and 850, and a higher score means that a person is more likely to make loan payments on time.
What credit score is needed to buy a car at CarMax? ›
Alternatives to CarMax
| CarMax | Carvana |
|---|
| Recommended Minimum Credit Score | 500 | 500 |
| Maximum Accepted Mileage | Not disclosed | 140,000 miles |
| Maximum Accepted Age | Not disclosed | Varies |
| Maximum Accepted Loan-to-Value Ratio | Not disclosed | Not disclosed |
6 more rowsAug 22, 2023
You may be surprised to learn that there's no minimum credit score for car loans. Some lenders offer auto financing even for people with poor credit histories. However, your credit score plays a crucial role in the rates you get as well as which lenders will work with you.
What is a bad APR for a car? ›
Average car loan interest rates by credit score
| Credit score | Average APR, new car | Average APR, used car |
|---|
| Superprime: 781-850. | 5.64%. | 7.66%. |
| Prime: 661-780. | 7.01%. | 9.73%. |
| Nonprime: 601-660. | 9.60%. | 14.12%. |
| Subprime: 501-600. | 12.28%. | 18.89%. |
2 more rowsMay 16, 2024
With a bad credit score, you'll likely be offered some of the highest advertised rates. According to data from Experian, borrowers in the subprime category (a FICO score between 501 and 600) can expect an average rate of 12.28 percent for new cars and 18.89 percent for used cars.
Can I get a car with a 580 credit score? ›
With a bad credit score, you'll likely be offered some of the highest advertised rates. According to data from Experian, borrowers in the subprime category (a FICO score between 501 and 600) can expect an average rate of 12.28 percent for new cars and 18.89 percent for used cars.
What's a decent credit score to get a car? ›
Your credit score is a major factor in whether you'll be approved for a car loan. Some lenders use specialized credit scores, such as a FICO Auto Score. In general, you'll need at least prime credit, meaning a credit score of 661 or up, to get a loan at a good interest rate.
Can I get any car with a 700 credit score? ›
The “prime range” runs from 661 through 780. If your credit score is anywhere between 700 to 709, you are in the middle of this segment, and you can get competitive rates to finance your vehicle. However, these depend on your shopping habits, income, and debt-to-income ratio.
