Car Loans - Things to be considered

Car Loans – The Procedure and precautions

Car manufacturing Companies are extending warm welcome with hands wide open to potential car buyers. In tune with this, Banks and Non-Banking Financial Institutions are coming forward with different types of vehicle loan facilities. Before we get attracted to the welcomes or facilities, some important pints are to be taken into consideration.

With the onset of the festive season, a number of car show-room dealers are entering into tie-ups with financing agencies. Apart from attractive interest rate discounts, dealers are trying to make the consumer benefitted with some offers.

* To get the benefit of interest discounts, first we have to study what actually and really we can gain from it. When it is published that the interest rate for purchase of car is only 7%, there is every possibility that there are some hidden charges/costs. After we start repayment and by the time we completely clear off the loan, it may end up with 12%.

* Once you decide the model or brand of the car and from whom to avail the car loan, explore the dealers, who offer good discounts or offer free car appliances and tools.

* Have clarity about the amount of EMI at the time of taking loan itself.

* Also ascertain the amount of loan you are eligible for, for which you need not directly approach the Banks. Don’t forget that every time you consult a Bank, your details will be included in the CIBIL report. There are a number of avenues available on-line for this.

* Before sanctioning the loan, Banks will take into consideration you age, your income, your employer, length of your service etc. Person aged 28 years may easily get higher amount of loan and it may not be that easy for a person aged 57 years to get a loan. Some Banks prescribe age more than 25 years as an eligibility condition for loan.

* Annual income also is one of the eligibility conditions. Nationalised Banks sanction loans only to persons with annual income of more than Rs.2,50,000.