To buy a car is a dream come true for most of us. Nowadays it has become the status symbol. Most of the time we plan to buy it but due to certain litigation, we postpone it. We bring here you a comprehensive detail to buy a car through the car loan. It is easily available with all public bank and private lenders. Now just read our very informative post on How to get a car loan and make your dream come true.
What is a Car Loan
A loan which is taken to buy a car is called Car Loan. It can not be used to buy other assets like a personal loan The car loan may be taken to buy a new car as well as an old or used car. After Home Loan it is the second most commonly availed loan by people.
When should you go for a Car Loan
You will be surprised to know that almost 80% of car sold by companies is through car loan only. If you also want to buy your dream car and do not have the full down payment, you can easily get the loan. Before you choose the car loan, you have to decide the car model. The loan agents are there in the show room. They will explain you the down payment required, Your loan Eligibility, Monthly Loan EMI and all documents required. You must compare the loan offers of at least 2-3 lenders in order to get the better loan proposal. There are various types of lucrative offers on car loan being bombarded by automobile companies.
How to Get a Car Loan
This is the most important part. When you step into a car showroom and finalize the car model, the loan agents will approach you. It is up to you how you negotiate for a better proposal.
When you apply for any loan, the lender will check your credit score. This credit score is managed by an organisation known as CIBIL. Your healthy CIBIL Score (700-900) is the passport to get your loan easily. Then comes your annual and monthly income slab. Type of employed is also a key factor. Whether you are self employed or salaried in a good organisation. These were some common factors of eligibility.
Most of the loan is disbursed up to 70-90% of total price of the car. Customer is required to pay the balance 30-10% as down payment. This decides your loan EMI and tenure of loan. Higher down payment lower your loan amount. Our loan experts advise customers to pay maximum as down payment. This will lower the interest amount payable to lender.
All KYC documents are required to process this loan.
- Address Proof
- Identity Proof
- Income Proof
- Cancel Cheque
- Loan Application Form
- Vehicle Registration documents
- IT Return filed for previous 1-2 years
To attract the customers, there is a cut throat competition in the loan market. We have listed the top 10 car loan lenders’ interest rate with break-up of EMI per 1 lakh.
|Car Loan Company||Interest Rate||EMI per Rs. 1 Lakh|
|SBI (State Bank of India)||9.20%-9.25%||Rs. 2086- Rs. 2088|
|PNB (Punjab National Bank)||8.65%-9.15%||Rs. 2059-Rs. 2083|
|Bank of India||9.25%||Rs. 2088|
|Central Bank of India||8.80%||Rs. 2066|
|HDFC Bank||9.25%-Rs. 11.25||Rs. 2087-Rs. 2188|
|Axis Bank||11%-12%||Rs. 2174-Rs. 2224|
|ICICI bank||9.35%-14.74%||Rs.2095-Rs. 2120|
|Canara Bank||8.70%-8.95%||Rs. 2061-Rs. 2073|
|UCO Bank||9%||Rs. 2076|
Loan is a liability. In case of a car loan you have to pay monthly EMI calculated on your loan sanctioned amount. The EMI can be paid through ECS mandate from your dedicated account. You have to ensure that on scheduled date of EMI, there is sufficient fund in the account. If EMI is not paid timely, you become the defaulter. In this case the recovery agent of bank or lender will approach you. However, It is always wise to pay the EMIs timely and relax from the loan default conditions of lender.
You can opt for the EMI amount and schedule both. Higher the tenure of repayment of loan, lower is the EMI. Even lower the loan amount, lower is the EMI. The schedule of EMI date can also be requested as per your income schedule. For e.g. if your salary credit date is 7th day of the month then you should choose 10th day of the month as your EMI date. This will easy to pay for you also.
Important Tips to remember:
- Compare the best loan proposal before you sign the loan application form
- Always pay the maximum amount as down payment
- Check for processing fees and other hidden charges like late fee, penalty
- Ask your loan agent to explain the terms and conditions both for pros and cons of loan
- Check the foreclosure of loan requirement
- Calculate the EMI and cross check the loan repayment schedule
- Remember your scheduled date of EMI
- Maintain the sufficient fund balance for EMI
- Keep the repayment tenure as low as possible
- Check for balance transfer option
- If any EMI is not paid due to any reason, call the customer care of lender and immediately deposit the EMI amount at any of their branch or office
We hope that you have gone through all the important aspects of a car loan. It will surly help you to make a wise decision during purchase of your new car.
We wish you to fulfill all your dreams. Keep visiting our website and do not forget to like, comment and share this on your social network like Facebook and twitter.