Bank of Baroda (BOB) Car Loan Interest Rates

Factors Affecting Bank of Baroda Car Loan Interest Rates

The rate of interest for new car loans at Bank of Baroda is 9.40%. You will be charged a particular rate of interest which, in turn, will be dependent on various factors. These factors have been mentioned below:

• Income-to-Debt Ratio - This is one of the most important factors that lenders take into consideration while offering car loans to applicants. It basically indicates the amount of money that you owe to other entities. It is always advisable to maintain a low income-to-debt ratio as it denotes your capacity of making EMI payments every month. It also increases your lender's faith in you. The EMIs should not be more than 50% of your monthly salary.
• Credit Score - Lenders always consider the credit score of the loan applicant. With respect to car loans, it plays a vital role in closing the deal. The parameter of credit score is essentially an indication of your credibility, a proof that you have cleared all debts in the past successfully, without any delays. Your chances of loan approval increase with a better credit score. It is typically recommended to have a score of 725 and above.
• Applicant's Income - Apart from the credit score and income-to-debt ratio of the applicant, lenders also check their income and occupation type while lending money. A steady income and occupation are indicators of your ability to pay off the loan in a timely manner. You are less likely to default on the payments of your car loan if you are a steady earner.
• Loan Tenure - Longer the tenure of your loan, lower will be the rate of interest. However, you have to take into consideration that a longer tenure means paying EMIs over a long period of time. It can be difficult choosing an appropriate loan tenure for your car loan. This is the reason why it is recommended to compute the EMI of your loan. Compute the interest payment for the selected loan tenure and choose the one in which your total payment of interest is less.
• Vehicle's Age - In a car loan, the vehicle being financed is used as security/collateral. This is the reason why banks and other lenders take the condition of the vehicle into consideration while deciding the rate of interest. It is important to take into consideration that modern vehicles from reputable manufacturers typically have a high resale value.

Overview of Bank of Baroda Car Loan

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