Top 6 Questions You Should Ask Before Applying For a Car Loan

Buying a car has become a necessity in today’s world. Customers have numerous options to avail loan from Banks/NBFC’s to buy their own car. Easy and Quick car loan is offered by some Banks but you should ask yourself the below questions before you apply for an Easy Car Loan.

Do you have enough funds to repay the loan?

The first thing that you should check is whether the car you want to buy is within your budget. People choose cars that are out of their budget and end up struggling for loan repayments. The next thing that you should check is whether you can comfortably repay the EMI every month. You may take help of online EMI Calculators that help you to calculate your monthly EMI amount. You can choose the best loan out of various options available if you estimate your EMI before availing the loan.

What Interest Rates will be charged for the car loan?

The rate of interest is one of the most crucial aspects while availing any loan, including a car loan. The rate of interest charged differs for every bank. Before opting for a Quick car loan, it is always advisable to explore various options so that you choose the one that suits you the best. The Interest Rate offered also depends on factors such as the loan amount, credit score of the applicant and the loan tenure.

What are the processing fees for the application?

Fees collected as upfront charges by the bank are charges for processing of the loan application. Today Bank offer discount on the processing charges usually during festive season. Some banks charge up to 10,000 rupees in the form of processing fees and some banks offer car loan with zero or minimal processing fees. You should always compare various charges and fees applicable on the loan before taking a decision.

What should be your down payment and tenure for the loan?

Good financial planning is a key for availing an Easy car loan since you will be paying regular EMIs for few years. If you opt for a higher down payment, then the loan amount sanctioned will be lower. The benefit of a shorter loan tenure is that you are free of debt sooner. A shorter tenure would mean higher EMI, but it would decrease the interest on the loan amount to be repaid.

The loan tenures for a new vehicle and a second-hand vehicle may be different depending on the lender or the bank you choose. Karnataka Bank’s Xpress Car Loan offers up to 84 months of loan tenure for a new vehicle and up to 34 months for a second-hand car.

What is the total amount financed by the lender?

Many banks and lenders offer loans up to 100% of the on road price of the car but with certain terms and conditions. It is always advised that you pay around 20% of the car’s price as down payment and take the loan for the rest of the amount. You should also try to opt for a loan with lower EMI by opting for higher tenure so that it won’t strain your other monthly budget.

Will there be any penalties for prepayment?

Prepayment allows people to pay off their debts in one go or a partial payment towards the loan. Many banks and lenders levy prepayment charges and other fees when you decide to pay off the debt before the end of the tenure. In case of prepayment, it is always advisable to choose a bank or a lender that have zero penalty charges or charge minimum preclosure amount.

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