FAQs on (Car Loan)
How do I get an Auto Loan?
1st, shop around for all the various finance schemes on Auto Loans available in the market by applying with us. Than you can decide from margin money schemes, advance (EMI’s) schemes & deposit payment schemes. Typically margin money schemes offer the most effective terms, but at the end of the day, effective rate of interest of the loan is what basically / essentially matters. This method provides a common podium for assessment of different schemes by discounting on the premise of cash flows.
How much loan amount can I get?
The loan amount depends upon:
If you’re buying a new car, you can get up-to 90% financing but some banks have a limit beyond which they do not offer loans. Also all different banks have some different terms & condition for different models (standard / premium, new / old) The percentage (%) of finance the banks give on cars is also determined on the basis of 2nd hand market value of that particular car. This is for cases, if default by any chance, the banks can get a higher resale value for the car. This makes the banks comfy enough to give higher percentage finance.
How long does it take to process the loan?
If all the required documents are in order, your process moves fast. You need / have to submit requisite documents like salary slip, proof of residence, tax returns, bank statements etc. The processing will take b/w 2 to 7 days.
Is credit profile important?
Yes, your credit profile is the most important factor / issue they will consider or think about before funding you. Your credit profile tells banks if one is able to pay back the loan.
What can I do if my credit profile doesn’t match the banks requirements?
If your credit profile doesn’t match the banks demands / requirement you can reinforce it by bringing in a co-applicant or guarantor who would be able to match the requirement.
Can interest rates be negotiated?
Yes, it’s possible for you to negotiate the rate of interest in almost all the cases with all the banks. The rate of interest can be reduced by as much as 2% if you satisfy the criteria set forth by the banks for claiming such reduction. So do cross check all possible / doable banks for such deductions.
Floating or fixed rate of interest?
A loan taken on floating interest rate is a better option / option when the interest rates are falling, but when once the interest rates are rising, opt for a fixed interest rate loan. Conjointly if you go for a fixed interest rate loan, you will know in advance what your (EMI’s) will be like and this will help / assist you in your financial budgeting. If you choose / select a floating interest rate, you may not be able to budget properly. So do the math & choose / decide wisely.
What is Flat and Reducing Balance interest rate?
Suppose you’ve got taken a loan amount of Rs.10 lac at 5% interest rate. You re-pay Rs.50 thousand in the 1st installment. If the 5% interest rate continues to be applicable on amount Rs.10 lac after your 1st re-payment, you are paying a Flat rate of interest. But, if 5% interest rate is applicable now on amount Rs.9.50 lac, you’re paying a Reduced Balance Interest Rate
How long can I get loan tenure for?
Usually auto loan tenure is accessible from 1 to 5 yrs. But some banks with schemes, provide / offer loans tenure for 1 to 7 yrs. The tenure conjointly depends on the type of car you wish / need to purchase. If it is a super-premium car the tenure is restricted to 3 yrs. only. Also know that, higher the (tenure), lower is the (EMI). However the total rate of interest outflow is higher.
Can I change the tenure and amount of loan taken after the loan amount has been disbursed?
Yes, you’ll be able to modify / change the tenure & amount of the loan. But this would imply that the rate of interest and therefore the amount of installment will modify /change accordingly.
Can I get 100% (percent) automobile / car financing?
You can, but it involves a trade-off. You’ll either have to pay advance (EMIs) or a deposit, so you never really get what they promise you. So find out from different banks where you can get the most effective options from.
What is Zero Interest rate Scheme?
Zero Interest rate Scheme is just that, Zero Interest rate Scheme. In this scheme you are not charged any type of interest rate and you only have to pay back the principal amount. But under this scheme, the amount financed is low & the tenure is very short. However there are hidden costs involved in this scheme as well.