Car loans – ways to get best offer and eligibility criteria
As kids, we would have definitely played games pretending to be driving a car with our friends as passengers. It is a childhood fascination and dream of every person to own a car. This article is for those people who are planning to get a car, with tips on how to get the best price for your car and the eligibility criteria for car loans helping them fulfill that childhood dream.
Let's start by discussing the ways to get the best price for your car.
1. Choose Your Car
A first car is really a dream come true and a special moment in our lives, so think about your requirement: is it for pure pleasure and passion or it is for function, do you need a six-seater or a small city car would do? The requirements of each person are different and the choices on the automobile market are plenty, time invested at this moment would reward you later. If you require guidelines for the same pour into car magazines and online blogs which cater to every type of car and every reader.
2. Negotiate the car price
Car dealers usually have huge margins on any sale they do. Try and negotiate the price of the car and reduce to the maximum possible price. Many dealers will offer discounts and offers, which may reduce the price of your car which invariably reduces the loan amount you borrow. Check out other dealers to compare the prices and choose the best option.
3. Know your credit profile
Before searching for any bank know your credit history. Your rate of interest, tenure and the loan amount offered is all determined by your credit score and report. Any discrepancies in your credit history needs to be resolved. These discrepancies may make the banker and NBFC to go for higher interest and lower loan amount.
4. Best interest rate
Similar to dealers put in some effort to find the best interest rate for loans. Dealers may push you to take out loans with banks they have tie ups with these may not be the best offer in the market. Do your own research and shop for the best loan rate.
5. Choosing of the tenure
When choosing the tenure, choose the lowest tenure possible. Most people will choose the longer term to pay lesser EMI. The point to remember here is that cars are a depreciating commodity. For such commodity having longer tenures will ultimately result in you paying more for the car.
6. Avoid accessories from dealers
Many dealers will not include accessories like audio systems as part of the car price. These are considered additional fixtures which might cost more at the dealers. You can get such accessories from reputed shops at a much lower rate. This can reduce the loan amount borrowed by you.
7. Read the fine print carefully
Read the fine print carefully on details like prepayment charges, interest rate, processing fees etc. to make sure you know what you are getting into.
Now that we have seen how you can get the best price for your car, let us see the eligibility criteria for any car loan.
From Rs.10000 per month onwards
Salaried or self-employed - Minimum 3 years of experience and 2 years of experience in current profession
Factors that affect the loan
Type of car – New or Old car will determine the loan amount as old car value is considered less and thus the loan interest will be high.
Cost of car – The cost of the car will also affect the loan amount. As the bank considers the car as the collateral against the loan, the bank in case of EMI default can sell the car to recover the rest of the loan. Thus, the higher the cost of the car the higher the interest.
Down-payment – If you put down a hefty down payment the money that the lender must give is less. In which case, the risk on the side of lender is less and thus, you can get a favorable rate.
Residence – The place of residence (urban, semi-urban or rural) and you must have stayed at the current residence for at least a year.
Is a guarantor required for a car loan, let's find out!
When you go for a car loan, the car on its own becomes a collateral, that is the car will be under the name of the lender for the duration of the loan. So, if a person defaults on the EMI the bank could seize the car and sell to get the dues. Some banks may ask for a guarantor in the case of senior citizens.
At the end of the day owning a car is a very special dream for most Indians. Do not make it into a bad experience by not doing your own due diligence. Make your car experience as you always dreamt about.
To know your credit history and to get the best offers for auto and car loans log into Creditmantri.com