First Time Buyer's Section:
Buying a car is a big investment decision involving finance
in the order of lakhs, but it can be exciting and rewarding, especially
if you get the right car at a fair price by choosing the best car
loan available in India. You can apply
1. The basic requirements for applying Car loan
The car finance loan amount depends
on factors like income, age, educational qualification, total number
of dependants on the applicant, spouse's income, total assets, current
liabilities, stability and continuity of occupation and credit and
savings history.
2. The Process
Application can be done directly to the Banks for car loans. Online
car loan forms are available with most of the banks. The major
steps involving the disbursal of car loans can be summarized as:
3. Repayment Option
The repayment options vary from bank to bank. But it
is worth to ensure the repayment plans accordingly before agreeing
to the loan. New car loan rates and used car loan rates vary and
depend on the age of the car. Maximum loan tenure also varies.
The interest rate & EMI depends on the tenure of the loan.
Payments are usually done through post-dated cheques (PDCs). Repayment
can also be done through Direct Debit Mandates. The repayment
due dates depend on the date of disbursement of the loan. However,
the Pre-payment of the loan is mostly associated with an additional
penalty charge.
4. Types of interest rates for the Car loans
The car loan interest rates can be either a fixed or floating.
In the case of a fixed rate loan, the interest rate on the loan
will remain fixed through the entire tenure of the loan, whereas
in case of a floating rate loan, the interest rate will vary according
to the specified clauses in the deed. In general Fixed Rate option
is available for Car Loans up to Rs. 5 lakhs.
5. Security
A charge on the car loan title is noted with local Transport Authorities.
Your spouse's guarantee, if his/her income has been considered
for fixing the loan amount, would also be required. Some other
security may also be required in certain cases. In case of Collateral
Security, tangible security of borrower or guarantor valued for
not less than 35% of the loan is required. Post dated cheques
to be obtained for the EMIs and Personal guarantees of the MD
and other directors in case of corporate clients.
6. Documents Required
The following documents are required by almost every
bank or financial institution:
