Srinagar Car Loan

Car Loans in Srinagar – Overview

Srinagar is the summer capital of Jammu & Kashmir and has a thriving economy. Residents in Srinagar consider owning a car a necessity rather than as a luxury as they constantly need to commute within the city for business, work, or study. However, not everyone can afford to buy a car paying the full amount in cash which is why many top lenders in the country offer car loans to people in Srinagar. These car loans can be availed at attractive interest rates and can be repaid in flexible equated monthly instalments (EMIs).

Interest Rate Offered by Top Lenders in Srinagar

How to Fetch Lower Interest Rates in Srinagar

• Maintain a healthy credit score – To fetch a lower interest rate on a car loan, you should maintain a healthy credit score, preferably above 750 as this is the minimum score set by most lenders. If you have a score of, say 800 and above, lenders are more likely to offer you a lower interest rate as the risk associated with lending to you, is lower.
• Avail loan of a lower amount - You will need to avail a loan of a lesser amount if you make a higher down payment. Doing so may compel lenders to offer you a lower interest rate as they will get an impression that you are financially very sound and can repay the loan easily. Availing a lower loan amount will also lead to you paying off your loan quicker.
• Keep your debt-to-income ratio low – If your debt-to-income ratio is low, chances of the lender offering you a lower interest rate are higher. This is because a low debt-to-income ratio is an indication of your high repayment capacity.
• Negotiate with your existing lender – Your existing lender is likely to offer you a car loan with a lower interest rate if you have a good payment record with them. This will, of course, depend on other factors as well, such as your credit score, loan tenure, your income, etc. Hence, before you approach other lenders and negotiate with them for a lower interest rate, it is best you check with your existing lender first.
• Explore the options and compare – Perhaps, the first thing that many of us do before availing any kind of loan is to check out all the options available in the market. This is a good practice because only when you do that, you can compare the options and make an informed decision.

Eligibility for Availing a Car Loan in Srinagar

To be eligible for a car loan in Srinagar, you will need to fulfil the below-mentioned criteria:

Documents Required

The documents required for a car loan in Srinagar will depend on your type of income and the lender. However, the basic documentation required has been given below:

FAQs on Car Loans in Srinagar

1. Can I close my car loan before the completion of the tenure?

Answer: Yes, you can foreclose your car loan by paying the outstanding loan amount. Many lenders will charge you a penalty on foreclosing the loan and hence, you should check for the charges before you decide to foreclose your loan.

2. Do I need to provide any security for availing a car loan?

Answer: No, you do not need to provide any security for availing a car loan as the vehicle itself will be considered as a security. The vehicle will be hypothecated to the lender which means that if you default on your payments, the lender will have the authority to seize the vehicle and auction it to recover the outstanding loan amount.

3. My credit score is 700. Can I get a car loan in Srinagar with this score?

Answer: You will need a minimum credit score of 750 to get a car loan as most lenders will require you to have this score. With your score, you may find it difficult to get a car loan and even if you manage to, you may be charged a higher interest rate.

4. I am a Non-Resident Indian (NRI). Is it possible for me to get a car loan in Srinagar?

Answer: Yes, there are some lenders such as Federal Bank and State Bank of India (SBI) who offer car loans to NRIs. However, there are conditions applicable to them. For instance, the NRI can apply for a car loan as a guarantor with a resident Indian as a co-applicant.

5. Is the processing fee paid before or after the car loan application?

Answer: Processing fee on a car loan needs to be paid upfront, during the time of application. However, other charges such as stamp duty charges, documentation charges, etc., are chargeable after the loan application has been suspended.