- The manufacturer’s warranty on the new piece relieves a great deal of headache one may have put in verifying the condition of a used car.
- A new car is obviously less troublesome and has the latest gadgets and features incorporated into it.
- However with all these benefits the new car does cost a lot more and has a higher rate of depreciation right from the moment it is driven out of the showroom.
- The insurance premium is accordingly higher in a new car.
- The banks and financing institutions offering car loans prefer to disburse new car loans since the government polices are aimed at increasing sales of new cars.
- The total amount disbursed is more in case of a new car loan ranging around 90% of the cost of the vehicle.
- Some banks are even providing loans up to the on-road cost of the vehicle which reduces the burden on the customer.
- The repayment tenures of new car loans are typically 5 to 7 years which gets the EMIs in a tolerable range.
- But most importantly the new car loans come at a much lower rate of interest which is typically around 13-14%.
How can i get car loan?
You can get a Car Loan by applying for one. However, you should first understand whether you are eligible for a Car Loan. The eligibility criteria for a Car Loan might vary from one lender to another. You need to choose the one that suits you the best. The financial branches of some automobile companies, like Tata, offer loans if you buy their cars. But, in case you plan to buy some other make, you’ll have to consider visiting all the leading banks around.
To make things easier, here is the eligibility criteria for a Car Loan:
Age: 18-75 years
Income: Above Rs 10,000 per month
Employment: Total work experience must be > 3 years; and > 2 years in the current position/business/profession
Model of the car: Only the approved models are eligible for a loan
Other factors include your residential area and stability of your stay at the current residence
Now that you know the basic eligibility criteria, we can move to the next part—choosing the right loan. Deciding which Car Loan to go with depends on a couple of crucial factors. Don’t panic! It’s nothing too complicated. Just a series of things you need to keep in mind. Here we go:
Before jumping into other factors that can influence your Car Loan, let’s start with the basic (and probably the most important of them all)—the loan amount. It directly depends on your savings and how much you can pay as down payment. It’s advisable to make a heavy initial payment instead of borrowing a huge amount. Why? Because it can significantly reduce your financial burden in the future and give you enough time, energy and resources to focus on other essentials of your financial security like a house, your retirement planning, building an emergency fund etc. Now’s when all your savings can come to your rescue. They can save you from the wrath of a long-term loan and tons of EMIs. Other important factors that decide your loan amount are the car model you’re aiming for and whether you’re going for a new or a used car.
While some people prefer short-term loans, some like to go for the long-term option. The major difference between these two types of people is that the former lot is okay with paying heavy EMIs, while the latter likes going easy on the EMIs. You can decide whether to opt for a long-term or a short-term loan option based on your current financial situation and other financial commitments. For instance, if you already have an Education Loan to repay, maybe a long tenure Car Loan makes more sense for you. But if your finances are pretty set otherwise and the only burden you have is that Car Loan, maybe you should go for the short-term option.
One of the most crucial factors to consider while choosing the right Car Loan offer is the rate of interest. This can vary depending on a couple of factors like the risk associated with the borrower, the bank (different banks offer different rates) etc. You need to look for the best interest rates before finalising any Car Loan offer unless you want to waste your money paying unnecessary interest.
Click here to apply for a Car Loan.
Here’s how to apply for a Car Loan.
Go to BankBazaar’s homepage and choose the Loan option using the Loans drop down menu at the top of the screen.
You can then compare the Car Loans that show up and choose one that suits your financial requirements. You can check the various parameters such as eligibility, amount of money you can borrow, rate of interest etc. Once you have decided on the Car Loan, click on ‘Apply Now’ to apply for the loan you have chosen.
After submitting your application online, BankBazaar will send you an instant e-approval form, which is then sent to the bank who you’ve chosen to take a Car Loan with. A representative from the chosen bank will then contact you, and you can track your application via SMS, email notifications or the mobile app.
Click here to apply for a Car Loan.