Buying a car for every man is a big dream, and the car loan makes it easy to accomplish. So most people take loans to buy a dream car.
For how long should a car loan be taken?
While people buy car loans mostly for a period of three to five years, lenders also provide loans for a period of more years. If you take a car loan for a long time, you will have to pay less EMI. You will have to pay more EMI when you take a loan for a short period. Therefore, the loan should be taken keeping in view the ability to pay the EMI.
What are the charges that customers have to pay for a car loan?
For car loans, companies also charge additional processing fees and some other fees such as prepayment or documentation from customers in addition to the interest rate. That is if you have thought that you have to take a car loan, check the rates of companies already. After this information, you will be able to bargain further.
Can customers transfer a car loan?
Banks also give customers the option to transfer car loans. That means you can transfer this loan to another person too. If you have bought a car and want to sell it later, but the loan is not over, the facility of the banks can prove to be very profitable. However, the process is slightly larger.
Can you also get a loan to buy a second-hand car?
When there is a shortage of money, many people buy a new car and buy a second-hand car. Through this, the dream of buying their car is fulfilled, and there is no greater economic burden. Those who are not even able to buy a second-hand car can also take a car loan and fulfill their dream.
What documents are required for the application of a car loan?
For the application of the car loan, you need to provide the following documents:
Proof of Identity
Proof of Address
KYC Documents
Proof of Income (Form 16 or 6 Months Pay Slip)
Proof of Age (minimum 18 years)
Photograph
Car Papers
On what basis is the loan amount fixed?
The loan amount is fixed based on customer income. Usually, customers get loans up to 80-90 per ]cent of the car price. Some banks also finance up to 100 percent. The CIBIL score, i.e., credit score also affects the loan amount.
How important is the credit score for car loans?
The EMI of car loans and other kinds of loans is fixed according to the score given by the Credit Information Bureau of India (CIBIL). The higher your credit score, the easier you will get the loan and the lower interest.
How can you know your credit score before taking a loan?
Customers should know their credit score before taking the loan. By visiting Cibil’s website (www.cibil.com), customers can know their CIBIL score at home. For this, they have to pay Rs. 550 and fill up an online form.
Is it mandatory to take insurance while buying a car?
The government has required third party insurance for all car and two-wheeler companies. You can take information from your car dealer. Car insurance is mandatory for any accidental calamity.
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