10 Facts to be known about your Car Finance

CAR LOAN/FINANCE

Car Loan / Finance: Getting a loan is a tough decision for every individual as our future is not

certain and we fear that if something wrong happens to our life, job, income stability, then how would we be dealing with the situation.

Similarly we fear from the vendor side that rate of interests should not be increased and authenticity of the vendor should be trustable. For all such worries we hardly get an answer and we step down to this decision without checking anything.

In context with car loan, we have provided you some facts that are to be known by an individual before opting for a car loan. Please have a look below and get your mind clear with the following facts before stepping down for a car loan.

History and Current Status of the Car Loan Provider: The first and the foremost thing is to check the

history and the current status of the car loan provider. History will depict you the years of existence, growing trend, any complaints and issues that had been registered against the vendor and loan providing status in the past.

Current status will show you the current market share of the vendor, capital adequacy ratio, customer’s reviews and complaints and the present growing trend of the vendor. This information will help you decide that whether you should go for that particular vendor or not.

State Laws and Regulations:

You should enquire about the state laws and regulations related to car loans and car purchasing. It includes an enquiry about the taxes, legal charges and stamp duty on which bank would be having some role to play.

Rate of Interest:

The next thing you should enquire is the rate of interest on your car loan. The best practice is to compare the interest rates provided by different vendors and then to decide according to your pocket size. You can compare the car loan interest rates quotes from www.bankbazaar.com.

Type of Interest:

There are two types of interest on car loans: Fixed rate of interest and floating rate of interest. Fixed rate of interest remains constant all over the loan tenure and floating rate of interest keeps on changing with the change in the base rate as specified by the RBI. But, floating rate of interest is cheaper than the fixed rate of interest initially.

So, according to the size of your pocket and income stability, decide upon the type of interest, as if base rate changes, floating rate of interest will change and might go up with the increase in base rate, hence, keeping your EMI on the higher side.

Amount of loan finance:

Now, when you have decided about the interest rate and bank, then ask for the amount of loan that the bank is going to offer you. Some banks offers 80% of ex showroom or on road price, some offers 90% and some may offer 100% on ex showroom price.

Based upon the funds you are having in your pocket, decide upon the loan finance amount and the bank respectively.

Tenure of the car loan:

Now, next thing you should consider is to check on the tenure of the loan. If you want your EMI’s to be less then chose the higher tenure that is 7 years as if now, and if you want tenure to be less irrespective of the EMI amount, then choose the lesser tenure of 3- 5 years.

EMI amount:

After checking your loan amount, rate of interest and the loan tenure, check your EMI amount and reconsider the above things if your EMI amount goes off your budget.

You can check your EMI amount through EMI calculator that is available at www.bankbazaar.com and can decide upon your budget and go ahead with your calculation.

Pre closure procedure and penalty:

Many a times people wants to close their loan in a year or so, when they have sufficient surplus funds. In that case you need to check the pre closure procedure and penalty laid thereupon as some banks charges penalty of around 1% on the pre closure of the loan account.

Vehicle Insurance: As we all know that vehicle

insurance is mandatory as per the government regulations in India. So, you just need to check that if your vendor is going to provide a vehicle insurance to you or else you have to separately go for it. And does the loan amount covers your insurance charges or not? All these answers you should get from your vendor or bank in terms of your vehicle insurance.

Your Credit score: Now a days, one more criteria is being

added in your profile to get a loan from the bank and that is ‘Credit score’. So, your one important task is to get your credit score from CIBIL.

If you are having a good credit score, then you’ll be entitled to less interest rates and EMI. If your credit score is poor, then you’ll get a loan with high rate of interest and it is also possible that you may not get any loan.

Understand the Car Loan:

Therefore, these are some of the facts to be known before getting a car loan. By knowing such important facts, you’ll get the best quote with full safety.

To have any type of information on car loans or to apply for a car loan, visit www.bankbazaar.com.

Thank you for checking through our slide. For more information about the Car Loans from different banks etc., then just browse through Bank Bazaar.

http://www.bankbazaar.com/car-loan.html