Auto Loan
While buying a car, most of us focus only on the car we are buying, its features, aesthetics, accessories, etc. We really don’t bother about the car finance till the time we step into the dealer’s ‘finance section ‘. At that point we don’t have an option but to avail the dealer’s offer for the loan from a financer associated with him.
As a smart customer it is prudent to have compared the loan offers available in the market and shortlist the one which matches your expectations and needs.
Auto loans can be availed to finance the purchase of a new private or a commercial motor vehicle. These are term loans with monthly EMI’s, It is secured by the value of the vehicle purchased.
The loan term varies from 3 years- 7 years depending on the customer’s requirement and eligibility. The amount of loan sanctioned depends upon the customer’s credit rating (CIBIL score), repaying capacity as assessed by annual income levels and the value of vehicle purchased. Most financers will fund upto 90% of the value of the vehicle. The balance amount has to be contributed by the customer as down payment.
Most of the salaried persons, self-employed professionals as well as business entities can apply for Auto loans. With attractive interest rates, minimal documentation and speedy processing, we make this easy for you.
FAQs
A car loan is a borrowing instrument that a Financial Institution i.e. Bank or NBFC provides an individual allowing him/her to purchase a car.
The amount of the loan depends upon:
- The cost of the vehicle.
- The type (standard/premium).
- The percentage financing offered.
If you are buying a new car, you can get up to 90% financing but some banks have a limit beyond which they do not offer loans. Also different banks have different terms for different models (standard/premium, new/old).
You need to submit basic docs i.e. Income Proof – last three Salary slip / last 2 Years acknowledged ITR along with Computation of Income), address and identity proof documents along with your PAN card. Any other document as required by Financial Institution.
Car loan is a secured loan where the Car you buy acts as a collateral. Therefore, there is no additional collateral requirement for a car loan. But you will have to hypothecate the car in the banks name and an endorsement made in the Registration Certificate (RC) book of the vehicle.
If all the required documents are in order, generally it takes 2 to 7 days.
The tenure of a Car loan ranges from 1 year to 5 years. Currently, a small number of lenders are engaged in providing car loans for longer durations of up to 7 years.
A loan guarantor or a co-borrower is only required if you are unable to meet the eligibility criteria stated by the Financial institution such as monthly income, age or credit score. Otherwise you can apply for a car loan on your own.
Repayment of loan can be done through post dated cheques (PDC) provided by you to your lender when signing up for the car loan. The other option is an auto debit facility where the EMI is automatically debited from your savings account after you have provided an ECS (Electronic Clearing Service) mandate to the lender.
NO. You cannot sell the car unless you repay the loan. An NOC is required from the banks before you can sell the car.
Zero percent financing is an offer provided by a few automobile manufacturers in collaboration with the lender i.e. Bank or NBFC. Under this plan, the automobile manufacturer is responsible for paying back the interest on the car loan to the financier instead of the borrower.
Yes, you can, but generally there are few terms and conditions attached to it. For starters, the lenders only allow car loan repayment after you have completed specified loan tenure and there is usually a pre-payment penalty as well. The prepayment penalty charges usually range from 1%-4% of the. It is recommended that you confirm all relevant charges with a bank before you make a pre-payment
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John Truman Wolfe
John Truman Wolfe