Personal Finance Awareness

Are you planning to buy a car?

Are you planning to buy a car?
You might have thought of owning a swanky car. A good car loan can make car ownership easy, enjoyable, and stress-free. So, how do you get an affordable car loan?

Most banks give you 80% to 90% of the car’s on-road price as a loan. It means you have to pay 10% to 20% out of your pocket when you buy the car. 

For example, if you take out a loan for a car with an on-road price of Rs. 12 lakh you will have to pay a down payment ranging from Rs. 1.2 lakh to Rs. 2.4 lakh.

Most banks now offer car loans with terms of up to 5 years, but some lenders offer terms of up to 7 years.

Below are some car loan tips helping you make the right choice.

Find the Right Deal

You must purchase the vehicle from a dealer who has a relationship with a bank that can provide you with the best financing options. Make sure you understand all of the charges. Examine the processing fee, prepayment charges, and interest rate in particular (fixed or floating, reducing balance or not). You can research and compare vehicles while also applying for a highly competitive loan.

Approach your existing banker

Getting a loan from a bank with which you already have a relationship can save you a lot of time, trouble, and money.

Check your car’s eligibility

When it comes to new or used cars, most banks have different eligibility criteria. In addition to the standard criteria, various banks will have additional criteria to evaluate a car’s loan eligibility based on its age, model, and condition.

Ensure you have a good credit score

You must have a credit score of 750 or higher before applying for a loan. If you have a good credit score, you will obtain better loan amounts faster and lower interest rates.

Get the right amount

Does the bank require a larger down payment on the car before granting you a loan? Is the loan based on the on-road price or the ex-showroom price? These will have a significant impact on the amount of car loan you can obtain.

To know more about car loans, you can connect with JNC FinTech.