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CAR LOAN
OVERVIEW- What is Car Loan ?
A Secured loan provided by the lender against the vehicle one intends to purchase. The vehicle itself becomes the collateral for the loan and can be seized if borrower fails to pay the loan back. Loan is paid in fixed installments. Ownership lies with the lender till the completion of full payment.
Types Of Car Loan
Fresh/New Car Loan
A brand car can be purchased with the aid of this loan direct out of the showroom. Financial Institution offers loan at an Interest rate of 9-14% per annum for tenure ranging from 1 to 7 years. New Car loans are provided for almost every model and make available.
Used Car Loan
One can avail 80-85% of the price of the car at an interest rate of 12-18% per annum from Banks and non-banking financial institutions. Repayment tenure may go from 1 to 7 long years. Pre-owned cars can be purchased which are less than 5 years old or doesn't exceed more than 10 years at loan maturity time.
Features of Car Loan
No Collateral required:-
No extra collateral is required to avail the car loan as the thing you don't have right now will become the collateral itself.
Makes you an owner easily
Many banks provide up to 100% finance on ex-showroom price of the car, you don't need to wait for too long to buy your dream car.
Flexibility to choose the tenure
Offering of loan for tenure up to 7 long years makes it easy for the repayment of the same. One has the opportunity to choose the tenure according to one's ease.
Loan for buying a used car
Many banks are offering loans for used cars. Though the interest rate seems higher than the interest rate on new car loan but the loan to value ration will be on the lower side here.
Negotiable Interest rate
Unlike any home loan,you have an opportunity of negotiating about the interest rate in a car loan if you have good credit score and relationship with the bank.
Benefits
Flexibility over the mode of payment
A simple way of paying through post dated cheques or auto debit facility where your equateed monthly installments (EMIs) will be deducted automatically from the bank account.
Flexibility to choose the fixed or floating rate option:-
One may choose the option of floating or fixed rate of interest. The ROI will depend on the type of interest rate one is choosing.
Q1. What is a car loan?
Ans. A vehicle credit is an acquiring instrument that a loan specialist, for example, a bank or NBFC (non-banking monetary organization) gives an individual permitting him/her to buy a vehicle. Vehicle credits have picked up ubiquity as of late as opposed to being an extravagance thing or an image of status, vehicles have developed to turn into a basic product for the consistently developing white collar class of India. With the expanded ubiquity of vehicle advances, most banks and NBFCs at present offer this sort of advance to people who have a decent record as a consumer. One point to remember with respect to a vehicle advance is the way that this credit puts resources into a devaluing resource for example the advantage (vehicle) purchased utilizing this advance is in reality going to cost less after some time.
Q2. Would i be able to get an loan to buy a used car ?
Ans. Truly, vehicle advance is offered for pre-utilized vehicles. In any case, the financing cost for such an advance would contrast from that of another vehicle. Be that as it may, the credit would just cover the cost of the vehicle itself, different expenses as move of enlistment, and so forth should borne by you.
Q3. Do I need security for a vehicle loan ?
Ans. Similarly as the name recommends, a vehicle credit is an advance conceded to an individual keen on purchasing a vehicle. Hence a vehicle credit is a made sure about advance where the vehicle you purchase goes about as an insurance. Hence, there is no extra security prerequisite for a vehicle advance. In any case, you do need to get the RC (enrollment authentication) of the vehicle embraced with the bank. This underwriting is dropped after reimbursement of the credit is finished.
Q4. What is the most extreme measure of credit that I can profit?
Ans. The most extreme credit sum affirmed may differ from one bank to the next. Normally, banks affirm credit sums that run from 80%–90% of the vehicle's on-street cost. Not many banks even loan 100% of the vehicle's ex-showroom cost. Notwithstanding these measures, the level of financing offered relies upon the value, kind of vehicle (standard/premium) and whether you are applying for another or used vehicle.