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Questions (FAQs) on
What is a Car Loan ?
Borrowing money from a bank or NBFC or lending institutions for the purpose of buying a Car is known as a Car Loan. You may take car loan for buying a new car or even used cars. Though used car loans vary from new car loans in some ways, but the basic structure remains the same.
When you buy a car, typically the bank agrees to finance you to the maximum of 80-90% of the on road price of the car that you are buying. The payment that you make upfront from your side for buying the car is called Car Loan Down Payment whereas the remaining amount becomes the car loan from the bank or NBFC.
Which banks offer best car loans ?
Car loans tenure typically varies from 12 months to 84 month but again the higher the tenue, the higher is the interest cost for you. Another very important thing is the rate of interest. All banks have a dynamic range typically between 8% to 13% and the rates vary depending on your profile, the cost of the vehicle that you are buying, tenure, your CIBIL score, your salary account relationship with bank etc. Though, almost all banks & NBFCs offer car loans yet the most popular car loans are :
ICICI Bank car Loan | HDFC Bank Car Loan | Axis Bank Car Loan | Yes Bank Car Loan | IDBI Bank Car Loan | SBI Car Loan | Kotak Mahindra Bank Car Loan | PNB Car Loan | Bank of Baroda Car loans | Tata Capital Car loan etc.
Eligibility Criteria for Car Loans
The eligibility conditions vary from bank to bank but the most common factors are :
Your annual Incone
Your employment history & stability
Ratio of Vehicle Loan against Car Value
Your CIBIL Credit Score
History of loans, outstandings & credit cards
If you are maintaining a banking relationship with a bank for 4-5 years and your transaction history indicate a decent financial health, in many cases private banks give you pre-approved loans. Pre-approved car loans means that you qualify the basic criteria & chances of getting the loan sanctioned is nearly 100%.
How do I get loan for a second hand car ?
Second Hand Car loan or a used car loan or Pre-owned Car loan are all same things. In case of a used car loan, all other parameters of loan processing remain the same except that the price or value of the car becomes variable. But if you are buying a second hand car thru a pre-owned dealer then in that case even the value is not that uncertain. So when applying for a used car loan, you need to first take a Quote for the vehicle along with vehicle inspection certificate. These would be required to process your pre owned car loan application.
How does a Car Loan Advisor help you ?
A car loan advisor gives you a detailed comparison of the loan offerings of various banks and helps you pick the best deal. Besides he helps you doing the documentation of your car loan and sometimes gets it processed in just a few hours, depending on your credit history. Moreover a Car Loan Advisor doesn’t take any commissions or fees from you, rather he gets paid directly by the bank. So in a way, you avail the expert services of a trusted car loan advisor for free.