If you really think about it, it's easier getting a loan for a car than a loan for bus fare!
  • Car Loan BYTES FROM OUR KITCHEN

    What Should you Look for when you Opt for a Car Loan?

    With the change in time, buying a car is no more an expensive affair, as it was once. The new-age consumers are smart and know how to take advantage of the car financing options. Moreover, since the banks and financial agencies are rolling out so many options for the car buyers, it has become easier for them to make an informed decision. However, to make the most out of your car loan, there are a few vital things that you must consider before taking the final call. Here are the things that you should look for when opting for a car loan:

    • Your CIBIL Score

    Before you apply for a car loan, first look for your CIBIL score. This is a vital aspect of a car loan as on the basis of your score, the bank/lender will decide your eligibility as well as the interest rate of the loan. While a high CIBIL rating will enable you to get a low-interest rate loan, a poor score can result in higher interest rate and might even lead to rejection in certain cases. So, the moment you think about taking a car loan, check your credit score instantly to know your eligibility for the loan. The minimum credit score preferred by banks is 750 or more than that. However, that doesn’t mean you won’t be able to get a loan if you have a score below this limit. There are banks and agencies who lend car finance at a lesser score depending on the profile of the applicant. Get in touch with such lenders to know your chances.

    • Low-Rate of Interest

    The next important thing to look for is a low-interest rate loan as it decides the EMIs that a borrower has to repay across the loan tenure. Hence, before reaching any decision, first check and compare the rates offered by various banks to find the most affordable option. Though the process might feel tedious at times, this is necessary to do as there is no standard for car loan interest rates. Different banks offer different interest rate to the customers after evaluating their profile and repayment ability. Moreover, since there are two types of interest rates, floating and flat, the rates differ from bank to bank. Remember a few points of difference in the interest rate can make a huge difference in the EMIs that you have to pay for your loan, so consider even the minute differences to find out the lowest one.

    • EMI Repayments

    When opting for a car loan, it is important to assess your capability of paying the EMIs on time before taking the plunge. Calculate all other ongoing EMIs for education, personal or home loans (if there is any) and then decide whether you can afford to pay the EMIs or not. If the affordability of the EMIs is not checked on time, it might result in default, debts, and finally repossession of the car. An affordable EMI amount will be one that will fit your monthly budget without overshooting it. In simpler words, you should only go for an EMI amount which you can easily pay off by your monthly income without putting any undue stress on your budget. To plan the monthly EMI properly, you can make use of the EMI calculators offered by the reliable third-party financial websites. Using these online tools, you can calculate the EMI on the basis of the interest rate and get to know the affordability of the loan.

    • Loan Repayment Tenure

    Another major aspect of a car loan is the loan repayment period and this is why it is pivotal to consider the repayment period carefully while borrowing a loan, The bank officials might offer you long repayment periods with lower interest rates, but understand that this way you will not be paying less, rather you will end up paying much more as interest. Initially, you might feel 7 years is a good amount of time to repay your loan comfortably, but the total amount that you have to pay as interest during this entire period will be extremely high. Remember, the longer loan tenure you choose, the more you will have to pay as interest outgo. Moreover, sometimes banks levy higher interest rates for loans taken for longer tenures thus increasing the cost even more. So, without getting influenced by the savvy bank executives, opt for a lower loan repayment period to pay less amount in interest.

    • Pre-closure/Foreclosure Penalty

    While opting for a car loan from any particular bank, you must check if it charges a pre-closure penalty. Pre-closing your loan means you have cleared your loan amount before the specified tenure and thus has saved a good amount of money that you would otherwise have to pay as interest. But when you pay a lump sum of money to the bank against the car loan before the actual repayment period, banks levy a pre-closure penalty on the remaining loan amount and if it happens it can dampen your happiness. Hence, before deciding on a bank, find out if the bank charges any penalty on pre-closure or foreclosure. Since the penalty rate is not the same for every bank, make sure to select the bank wisely. Consider banks which either doesn’t ask for any penalty or charges a very minimal amount.

    • Processing Fee

    Almost every bank charges a fixed amount to process the car loan application of a borrower. Even sometimes it is seen that, while some banks and agencies offer car loans at low-interest rates, they charge a high amount of processing while offering the loan. The processing fee varies from one bank to another and the borrower should ask if the bank is charging a processing fee or not. Generally, banks charge a fee on the loan amount and it somewhere ranges between Rs.2, 000 to Rs.5, 000. However, since banks charge 0.5% to 1% of the loan amount, if you take Rs.5 lakh for purchasing a car you might end up paying a huge amount of amount as processing fee. So, try to negotiate with the lender to save some amount on the fee. Sometimes during festival seasons and special offers, some banks waive off up to 100% of the processing charges. You can look out for such offers while applying for the loan.

    • Service Tax

    Service tax is an aspect which most of the car loan borrowers are not aware of. This is a basic charge that the banks take from the borrowers against their service and this charge can’t be questioned or negotiated. But sometimes bank might ask you to pay the tax quite often and if you have already agreed to the bank’s terms and conditions you can’t say no to them. Also, while some banks charge service tax as a one-time amount, some other charge it annually. So, before agreeing to the bank’s term to pay service tax for the loan, ask how frequently you will need to pay the tax. Enter into an agreement if you agree with the terms.

    • Car Insurance

    Sometimes when you opt for a car loan, lenders try to convince you to take credit insurance as well as some other additional insurances to make some profit. Despite the fact that credit insurance is a very helpful tool to cover your loan payments, it is not a good idea to buy it from the car loan lender. Since they will get the insurances only from the banks and agencies whom they are affiliated with, you will not be able to get the best deal on the insurance premium. Hence, while opting for a car loan don’t get influenced by the insurance policies offered by the lender. Rather do a market research, compare and evaluate various policies and select the best deal for yourself. If you feel the need to consult an insurance agent, make sure to discuss with an agent who doesn’t have any affiliation with your credit lender.

    • Acceleration Clause

    This is one more essential thing to look out for when you are taking a car loan. An acceleration clause implies that the borrower must pay off the entire loan immediately in circumstances when he/she faults on the EMIs or the full payment. This clause can also activated if he borrower commits any intentional breaches or moves/sells the car without the lender's knowledge. Once the lender sends a notice to accelerate your car loan you have to pay the entire loan amount, failure to do which will lead to repossession of your car. This if happens can result in a huge financial stress for the borrower as he/she has to repay the full loan amount instantly to avoid legal proceedings. As such, it is crucial to check the loan agreement in detail before agreeing to it. Moreover, it is better to choose a lender who doesn't want to include any repossession clause in the loan agreement to avoid future hassles.

    • Multiple Quotations

    Every bank offers different car loan interest rates and other associated charges. Hence, it is extremely important for you to get a quotation from various banks and agencies before applying for a car loan from one specific lender. On the basis of their individual rules and criteria, every bank quote different rates and this is why you should always invite quotes from multiple banks and financial agencies before placing your loan request with anyone. This way you will come to know their rates along with other associated financial charges.

    • Special Offers and Schemes

    Don’t be in a hurry when you are availing a car loan. Rather be patient and look out for special offers and schemes to save some good amount of money. Most of the banks give special offers on car loans during the festival seasons or a certain period of a year. Take advantage of such offers which include waivers on processing fee and pre-closure penalty, 100% funding on the vehicle, low- interest rate, special gift vouchers, etc. Borrowers who have good credit score with a sound profile might even get customised deals on the car loan from the lenders. You might even turn lucky to get a 0% finance scheme on your car loan. So, don’t forget to check the offers and schemes before taking the final call.

    • Loan Agreement/Contract

    Last but not the least, don’t forget to carefully check all the documents related to your car loan before finalising the deal. This is the only way to know if there are any hidden charges that the bank has levied on your loan. Moreover, there might be other terms and conditions that you mightn’t be comfortable with. Hence, the borrower must go through the loan agreement and all other associated documents minutely and cross-check every single point specified in the agreement before signing the papers. This will make you well-informed about the contract on one hand, and will also keep you prepared for any unexpected situation.

    Customer Reviews

    • Bank of Baroda Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      The experience with them has been quite good with this loan where the loan amount has been sufficient. The interest rate which they offered has been nominal when compared with the market rate and there has not been any extra charges which they had made so far. Their customer support team had also been supportive as well.
      Was this review helpful? 2
      , navi mumbai
      Reviewed on Jan 18, 2019
    • HDFC Bank Car Loan
      "Good Experience"
      0.5 5.0/5 "Blown Away!"
      Before three years I purchased second vehicle that is Hyundai I 10 , the documentation process was good with HDFC. The dealer coordinated with the bank, hence the process was quick. I got multiple options but I chosen HDFC, the Interest rate is better because I am an existing customer.
      Was this review helpful? 0
      , delhi
      Reviewed on Jan 18, 2019
    • HDFC Bank Car Loan
      "Good Experience"
      0.5 5.0/5 "Blown Away!"
      I was taken car loan from HDFC, first time I purchased SANTRO car, the documentation was very convenient. They gave me the door step service I went to the dealer and they done the process, and on time I got the car deliver. They gave me the flexible emi option.
      Was this review helpful? 1
      , delhi
      Reviewed on Jan 18, 2019
    • SBI Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been quite a good experience i had with this car loan and the loan amount which they had provided has been sufficient as well. The interest rate with them was around 9.25% which was nominal when compared with the market rate. The charges which they had made has been nominal as well, and even their customer support has been responsive as well.
      Was this review helpful? 2
      , bhubaneshwar
      Reviewed on Jan 17, 2019
    • SBI Car Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been taken my car loan with State bank of India, they have given me sufficient loan amount, and i am satisfied with the loan amount , and the rate of interest they have charged me up to 9.45% which is bit high compare to other bank,i have asked for 9 % but its okay, and the processing fee they have charged me was nominal,overall service is good.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jan 17, 2019
    • Kotak Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been taken my car loan with Kotak mahindra bank recently ,like 2 months before i took this loan, and i am happy with the loan amount they have given me ,it was sufficient for me, and the rate of interest they have charged me up to 9.3% which was nominal for me and the processing fee they have charged me was nominal, the loan amount process went smoothly. the overall service rendered by them was really good.
      Was this review helpful? 1
      , chennai
      Reviewed on Jan 17, 2019
    • Central Bank of India Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It was a good experience i had with this loan and the loan amount which they had provided has been sufficient. The interest rate with them is quite nominal when compared with the market rate. There has not been any sort of additional charges which they had made so far.
      Was this review helpful? 1
      , bangalore
      Reviewed on Jan 13, 2019
    • SBI Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I took my car loan in State Bank of India by last year. The charges are normal. I have spend down payment nearly 1L out of 7L. The branch is near to my residence so will never contact the customer service. The process was immediate and it was completed within 2 days.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Jan 12, 2019
    • HDFC Bank Car Loan
      "Its Excellent"
      0.5 4.5/5 "Excellent!"
      HDFC gave me the door step service for the car loan. I took the loan before three years. It was the fantastic experience for me because I got the better interest, I took the loan for 5 years but I done the foreclose in three years , there was no charges for it.
      Was this review helpful? 2
      , ahmedabad
      Reviewed on Jan 11, 2019
    • Capital First Car Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      The process in getting my Car loan from them has been quite good and the process went smooth. The loan amount was sufficient but the interest rate with them has been quite high when compared with the market rate. Their customer support and their response has been good and has been helpful as well.
      Was this review helpful? 2
      , bangalore
      Reviewed on Jan 10, 2019
    • HDFC Bank Car Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      My car loan experience with HDFC has been good and the loan amount which they had provided has been sufficient. The interest rate with them has been nominal and there has been some charges like processing fee. Overall their has been a help from their customer support as well.
      Was this review helpful? 1
      , pune
      Reviewed on Jan 09, 2019
    • HDFC Bank Car Loan
      "Average Loan Service"
      0.5 3.0/5 "Satisfactory"
      I have approached the bank directly for my car loan. Since I'm existing customer of HDFC for 13 years, i have chosen them. I purchased the loan amount of Rs. 2 lakhs. They have offered me a interest rate of 16% In October 2018, i have closed this loan. Total tenure period of the loan was 3 years. Car Dealer has recommended me about this loan.
      Was this review helpful? 4
      , srikakulam
      Reviewed on Jan 09, 2019
    • Magma Car Loan
      "Average service"
      0.5 1.5/5 "Bad"
      I have been using my car loan with Magma Fincorp previously, they have given me sufficient loan amount ,the rate of interest they have charged me was high,and the processing fee they have charged me was high , i was not happy with there service.
      Was this review helpful? 3
      , ghaziabad
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been using my car loan with HDFC bank, there service is too good, the loan amount they have given me was sufficient,the rate of interest they have given me up to 9% which is nominal for me,and the processing fee they have charged me was nominal only they have charged me up to 1% only,and still my loan is running ,there was no hidden charges they have charged apart from that,overall service is good.
      Was this review helpful? 1
      , ghaziabad
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Nice offer and nice loan"
      0.5 4.0/5 "Great!"
      I had a car loan with HDFC 1 year back. They have given me a nice offer hence i opted the loan with HDFC. I'm not sure about the partial payment and pre-closure facility. They have given me a nice interest rate according to what i want. I was taken a loan amount of Rs. 3 lakhs.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 08, 2019
    • review Car Loan
      "Need to reduce the charges"
      0.5 3.5/5 "Pretty good"
      I have taken a car loan in Nissan Institution, it was good. I bought the car from same showroom and they have provided me a facility. The rate of interest was high. The documentation procedure was simple. I have taken the loan almost 2 years back and its still running. The loan tenure is 5 years.
      Was this review helpful? 1
      , mumbai
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Looking for less interest rate"
      0.5 4.0/5 "Great!"
      My car loan experience was good with HDFC bank, loan amount was sufficient and the rate of interest was high when compared to other banks. Customer service was good and they responded on time. The tenure period for this car loan is for 5 years.
      Was this review helpful? 1
      , new delhi
      Reviewed on Jan 08, 2019
    • ICICI Bank Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my car loan with ICICI bank, the rate of interest they have charged me was nominal and they have charged me processing fee they have charged me which was nominal, the loan amount they have given me was sufficient according to the car price i got my loan, still this loan is running,overall service is good.
      Was this review helpful? 3
      , new delhi
      Reviewed on Jan 08, 2019
    • IOB Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my car loan with Indian overseas bank, the loan amount they have given me was sufficient, they have charged nominal rate of interest they have charged me up to 9 % which was nominal and there is zero processing fee , so far there service is have experience was good, they have not taken any hidden charges ,there overall service is good.
      Was this review helpful? 2
      , mumbai
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Good loan experience with HDFC"
      0.5 4.0/5 "Great!"
      My car loan running with HDFC bank, the customer service is super and the fast approval on the disbursement. They taken 15 days to deliver the car. The principal amount is Rs. 4 lakhs for the tenure of 5 years, the car model is baleno which is latest.
      Was this review helpful? 3
      , aligarh
      Reviewed on Jan 07, 2019
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