Updated: Nov 14, 2018
Everyone who is reading this, meet Nikhil. Like every other middle-class person with a loving family, he was searching out for a car loan. But he lacked vigilance while figuring out the best car loan for him, the risks associated with it and how he should prepare for it beforehand. Instead of doing thorough research, he just went ahead sign up for a high interest loan with higher expenses. You should not rus
Before you take any unplanned step like Nikhil, let us enlighten ourselves with the following things to consider before applying a car loan.
Car – Is it a necessity or a luxury for you?
As you analyze your requirements, you can decide which kind of car is appropriate for you. For instance, if you prefer to drive a car to the workplace, then a luxury car is not an option for you. Ask similar questions to yourself and make a decision
Handling the monetary pressure of a car loan
A car loan is no joke. Can you handle the pressure of EMIs? Do you have home loan EMIs too? What are your monthly expenses? Are you replacing your savings with car loan EMIs? Another tip – Be honest while answering these questions. Also, if you already own a car sell your car and then only buy a new. Your old car can give you extra money. Sell you car now online with Cars24 and get ₹50,000 more
Negotiating with the bank
If you have a good CIBIL score, or you are good in research, then finding a loan provider with lowest interest rate is the best decision. If you are paying a higher amount of down payment, it means lower debt amount. Does your bank charge any hidden costs? What are the pre-closure penalty charges levied?
Handling the car maintenance
Consider car’s maintenance charges before applying for a car loan. You should analyze whether EMIs and maintenance charges fit into your budget.
Understanding the risks associated with car loan deals
Your job does not end here. Analyzing your risks related to a car loan is another vital step in this process.
Even if your dream car excites you now, you should understand that you have to pay EMIs on time. So, before getting carried away with any new deal, analyze your personal finances.
Do proper research
If you settle within the first two deals, then you might have not explored further options. Hence, it is wise to negotiate for the best deal.
Checking out car loan providers
This risk is tedious and is hardest step in the car purchase journey. Seeking the best car loan deal is tricky and you cannot settle with the first option itself. Shop around, negotiate, talk to the bank managers, and try to seek references.
If you do not have a good CIBIL score -
So, you don’t have a good CIBIL score and this is your biggest worry. Yes, we all understand that a CIBIL score determines one’s loan eligibility. But we can surely take small, smart steps in improving our credibility and in availing a better deal.
Here are helpful tips that can offer ease to your car loan journey.
Instead of applying for several loans at one time, focus on the car loan itself.
Try to pay off outstanding dues, and make timely payments towards your loan installments.
You can even offer to make a down payment of a higher amount, so that the loan amount and EMIs drop down significantly.
You can choose a car that suits your budget and your CIBIL score. Or you can even purchase a second-hand car.
Here are the 3 car loan providers with the best interest rates in 2018
Anyone between the ages of 18 to 70 years can apply for this loan.
The interest rate starts from 8.7% and is offered for 85% of the on-road price of the car.
With no processing fees till 31.03.2019, the loan tenure is offered up to 7 years.
Pre-closure charges are 2% on the average balance of the previous 12 months.
Best in terms of interest rates.
Available for both old and new cars.
Flexible repayment options.
Easy application process through the online portal.
A guarantor is required to co-sign loan deal document.
One of the oldest commercial banks of the country, CBI offers loans for new cars up to Rupees 75 lakhs, depending upon other details.
People between 18 to 65 years can apply for this car loan.
Interest rate is 8.7% onward.
A loan tenure of up to 7 years is offered, with a loan amount of 90% of the on-road price of the vehicle.
Flexible terms of car loan.
No online facility available.
A visit to the bank is required.
Embedded with salient features, SBI offers a number of car loan products for its customers, depending on the flexible needs.
Any customer from the age group of 21 to 60 years (salaried as well as self-employed) can apply for this loan.
If you are applying for SBI car loan, then keep in mind that it is the largest lender in the country.
The interest rate is 9.25% floating.
One of the lowest interest rates in the industry.
Standardized eligibility criteria.
No processing fees incurred.
No additional pre-closure charges.
Takes considerable time for loan processing.
One has to visit the bank personally with the filled application form.
So, applying for a car loan is definitely challenging, but if you are vigilant enough, then you will experience ease and comfort throughout the process. You also need to seek information about each loan service provider from internet. Think wise and think twice before a car loan application.
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