About Car Finance: Personal Car Finance is a complete subsector of personal finance, with numerous different products available. These include a straightforward car loan, hire purchase, personal contract hire (car leasing) and Personal Contract Purchase. Therefore car finance includes but is not limited to vehicle leasing. These different types of car finance are possible because of the high residual value of cars and the second hand car market, which enables other forms of financing beyond pure unsecured loans.
|Interest Rate (Monthly reducing balance)||10.5% - 12.75%|
|Processing Fees||Rs. 500 to Rs, 5,000|
|Loan Tenure||1 year to 5 years|
|Pre-closure Charges||2% to 4% on outstanding loan amount|
|Guarantor Requirement||No guarantor required|
Owning a car of your choice is no longer just a dream, it can become reality with low-interest rate car loans from top banks and NBFCs in the country. Whether you want to go on weekend road trips or weekday commutes to the office, having a car of your own can come in handy. No matter how small or big the size of your family, you can choose a car that suits your travel needs. From Sports Utility Vehicles (SUVs) and Multi-Utility Vehicles (MUVs) to hatchbacks and sedans, you can get car loans to purchase a car of your choice from the top carmakers in the market. You no longer have to worry about expensive taxi fares and rental car fees. You don’t have to go through the inconvenience of borrowing a car from a friend or a family member to get to places around the city.
Take a look at the step-by-step guide to apply for a car loan in Ghaziabad:
Upon car loan approval, the loan amount will be disbursed to your bank account or the dealership at which you are purchasing the car within a matter of a few hours.
Car loans are repaid in fixed monthly installments over a specified loan tenure called Equated Monthly Installments (EMIs). The borrowers pay monthly EMIs that consists of principal and interest. The loan tenure for car loans usually ranges from 1 to 7 years in the case of new car loans and 1 to 5 years in the case of used car loans. The rate of interest on car loans is determined by the lender. The interest rate differs depending on the type of car loan - new or used car loan and the loan tenure - short or long loan repayment period. Some lenders offer lower interest rates to existing customers.
It is advisable to maintain a low debt-to-income ratio wherein your car loan EMI doesn’t exceed more than 40-50% of your income so as to avoid defaulting on your car loan repayment. Putting down a large down payment on your car can also bring down the cost of your car loan.
Car loan fees and charges
Processing fee: Lenders levy a processing fee which is a small percentage of the principal amount that has to be paid upfront at the time of loan disbursal. Some lenders waive off the processing fee as a discount on special occasions or for special customers.
Prepayment fee: If you want to prepay your car loan in part or full, lenders levy a fee called the prepayment/preclosure fee which is a small percentage of the prepayment/preclosure amount. The percentage differs depending on the time period during which you make the prepayment. Car loan prepayment is allowed only twice over the loan tenure and only once in a year. You can pay a part or the whole of the loan amount only after 6-12 successful EMIs.
Foreclosure fee: Lenders allow borrowers to prepay their car loan in full before the end of the loan tenure called foreclosure. They also levy a penalty fee called the foreclosure fee for such as an allowance. Foreclosure fee is a small percentage of the foreclosure amount. However, if the foreclosure amount plus the foreclosure fee is more than the regular EMIs then it is advisable to settle for making additional EMI payments or increasing the percentage of yearly EMIs. This way, borrowers can save on interest.
|Bank||Interest Rate||Processing Fee||Loan Tenure||Loan Amount|
|State Bank of India||8.90% - 9.40%||Rs.1,000 to Rs.1,500 plus GST||7 years||Up to 85% of the on-road price of the car|
|HDFC Bank||9.00% - 10.25% p.a.||0.4% of loan amount or Rs.10,000, whichever is lower||1 to 7 years||Up to 100% financing|
|ICICI Bank||10% - 1.75% p.a.||Rs.2,500 to Rs.5,000||1 to 7 years||Up to 100% of ex-showroom price of the car|
|Dena Bank||9.05% p.a.||Nil||1 to 7 years||Rs.1 lakh to Rs.2 crore|
|Axis Bank||8.50% - 11.25% p.a.||Rs.3,500 to Rs.5,500||1 to 7 years||Rs.1 lakh minimum and maximum up to 100% on-road price of the car|
|Bank of India||8.90% p.a.||Rs.500 plus GST||7 years||Rs.50 lakh to Rs.1 crore|
|Canara Bank||8.70% - 9.25% p.a.||0.25% on the loan amount subject to a minimum of Rs.1,000 and maximum of Rs.5,000||7 years||Up to 80-90% of the on-road price of the car|
|Central Bank of India||8.85% p.a.||0.50% of loan amount subject to a minimum of Rs.2,000 and maximum up to Rs.20,000||7 years||Rs.75 lakh maximum|
Note: Interest rates and processing fees are subject to change at the discretion of the banks. Check the official website of the bank for applicable rates and fees.
Here are some of the frequently asked questions about car loans:
Car loan EMI can be calculated using the car loan EMI calculator that is available on the lender’s website. It is an online tool that is easy to use and gives instant and accurate results. You have to just enter your proposed car loan amount, interest rate, and loan tenure into the tool. You will get the EMI results in the form of an amortisation table which is a periodic representation of your loan repayment schedule.
Depending on the EMI results, you can find out how much your proposed car loan will cost you on a monthly basis. You can also create a budget that will ensure you don’t default on your car loan. What’s more, you can also make informed decisions on whether or not to prepay the loan or shorten your loan tenure in order to save on interest.
Salaried employees, self-employed persons, business people, professionals, corporates, firms, societies, agriculturists, central and state government employees, and pensioners can apply for a car loan. They must be aged between 21 and 65 years, have a steady income, and a good credit score.
The lender has the right to repossess the car if a borrower defaults on his car loan. The car will be put up for auction in order to compensate for the outstanding dues. The borrower can choose to bid for the car in the auction if he or she has sufficient funds to pay for the car after repossession.
Paying your credit card bills on time, making loan EMI payments on time, and maintaining a balance between secured and unsecured loans can help improve your credit score. Keep in mind, multiple loan rejections, bankruptcy, delayed/skipped EMI payments and credit card bill payments, and defaulting on loans can have a negative effect on your credit score.
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