With soaring real estate prices in cities, people have started moving to suburbs. Owing to this factor, cars have become a necessity today. The festive season, which is one of the best automobile shopping seasons in India, is also not far away. In case you are planning to buy a car of your choice, you should be very clear about making the payment for the vehicle or arranging for its finances. In this article, we will provide you with helpful hints for a Best car loan:
Choosing your Lender
Once you select the car you want to buy based on your requirements, the next most important thing is to select your lender. The car loan industry comprises a huge number of banks and NBFCs that provide highly competitive offers for the buyers. If you research properly and perform a comparative analysis of offers documents of various institutions, you can easily zero in on the best lender as per your requirements. You can also visit the bank’s branch and negotiate for the lower rate of interest.
Tip: NBFCs offer relatively lower interest rates than major banks.
Read Offer Documents Clearly
Different banks interpret the terms and conditions differently. There may be some banks that are lenient on levying fees and charges. However, some institutions charge a hefty fine of fees for providing a specific service. It is generally seen that banks offering lower rates of interests have more restrictions. It is best advisable to read all terms and conditions and clarify any confusion before getting the loan sanctioned.
Tip: Do not just go for the lowest interest rate. Look for a balanced loan offer.
Your Car Loan Tenure
The period for which you have taken the car loan is your loan tenure. Industry experts always advise buyers to keep the tenure as short as possible. Lower the tenure, lesser is the amount that you have to pay back during repayment. However, it should also be kept in mind that the small tenure should not become a financial burden. The loan should be balanced in such a way that you pay the lowest loan amount in the longest possible tenure.
Tip: Go for a balanced loan tenure where you can also save a small part of your salary even after paying your EMI.
Fees and charges on your Car Loan
When you apply for a loan, you have to pay certain fees and charges irrespective of the loan amount such as processing charges, service charges, etc. Some banks also charge prepayment fee, foreclosure charges, etc. Fine is also levied on delayed EMI payments or cheque bounce. You should check all rates beforehand so that when you are stuck in some situation, you are not penalized too much. Also, some banks have very high foreclosure charges. You should not opt for such a loan where you have almost no flexibility. Analyse the conditions and calculate the total loan amount in case of timely payment as well as payment before maturity.
Tip: Opt for a loan that has lower fees and charges and low-interest rate.
The Indian automobile sector is booming and buyers are also very enthusiastic owing to the ease with which loans are sanctioned these days. The impact can also be seen in reality where more than 2.75 Lakh cars are manufactured every month for domestic consumption. SIAM has predicted a positive growth for car manufacturers. Banks make very lucrative offers to draw in more customers. If you research smartly and keep the helpful tips mentioned above in mind, you can save a considerable amount on your car loan.