In this face-paced world, owning a car has become a necessity. Using public transportation becomes quite stressful and time-consuming. A car is your personal mode of travel and offers a high degree of convenience and safety.
Purchasing a car, whether new or pre-owned, is a huge decision. There are numerous factors to be taken into consideration such as brand, model, and most importantly – finance. Spending all of your savings to buy a car is not a feasible option. You may opt for a car loan, and finance your car purchase easily.
About car loans
There are numerous financial institutions offering loans to those seeking to buy a car. The borrowed amount has to be repaid over a period of time through regular installments known as Equated Monthly Installments (EMIs). Once the principal borrowed amount and the interest have been paid, the contract is then terminated.
Features of car loan
While borrowing finance, be it new or used car loans, it is important to consider the following features.
- Interest rate
The rate of interest is the most important aspect of a loan. It is the amount paid to the lender for servicing the loan. Higher the interest rate, greater will be the amount to be repaid. Therefore, choose a lender offering the most competitive interest rate as it will help you save a significant amount of money.
- Loan tenure
This is the period during which the loan has to be repaid. Higher loan tenure indicates that you may repay your loan over a longer period of time. Subsequently, the amount you pay towards your EMIS for your new or used car loan will be lesser.
- Repayment plans
In order to provide customers with the best terms, some lenders offer customized repayment plans. You, therefore, have a choice to increase or decrease the EMI amount based on your cash inflow and outflow. This flexible structure allows you to manage your finances easily.
- Fees and charges
Besides the rate of interest, there is a range of additional fees that you need to consider. These include processing fee, documentation charges, pre-payment penalty, foreclosure fees, and part payment charges, besides others.
Eligibility and documentation
In order to avail of car loans, it is necessary to be eligible for it. While the eligibility criteria may vary from lender to lender, the basic criterion includes a minimum age and salary as specified by the lender. In order to support your application, you may submit the necessary documents required. Upon verification of these documents, the application is sent for processing, and the amount is then disbursed to your account.
The automobile market in India is growing at a rapid pace. Acknowledging this demand for vehicles, lenders are providing finance at attractive terms. You may take advantage of such loans and buy your dream car without any hassles.