Always wanted a car? You are not the only one. Owning a personal automobile is a dream for many and has become a requirement. In this fast-pacing and changing world car is a necessity to travel from one point to another in as less time as possible. What could be a better option than a car for such a purpose?
Wealthy people, on the one hand, can easily own a car through direct payment, but on the other hand, what about middle-class people?
Here starts the job of the lenders. People apply for car loans and, on approval of the application, receive a brand-new car. There are various models and brands of cars in the market. One chooses the best car according to personal likes and budget.
What is a car loan?
A car loan is a loan that allows you to purchase a brand-new car of your preferred brand for personal use. The lender loans the money directly to the dealer on the buyer’s behalf. The buyer must repay the loan in installments called EMIs over a specific period with a particular interest rate.
Generally, lenders offer up to 90% of the car’s price, and the buyer pays the remaining 10% as a down payment. This 90% of the money is repaid to the insurance company by the buyer in EMIs over a certain period, ranging from a few months up to 7 years with a rate of interest.
Points to remember while applying
- One should research the interest rates and other terms and conditions offered by various banks and lenders and compare them. In this way, you will understand the market, and then you can choose which bank to apply to. Choose the best one with a low-interest rate and maximum benefits.
- One should know one’s financial status and job security to apply for a loan. You should be aware of whether or not you can clear all the EMIs. Legal actions can be taken if you take the loan and fail to repay it.
- Bank will ask for a few documents for the applications, such as; photo ID and age proof, signed application form, residence proof, bank statement for the past few months, etc. Make sure to provide all complete documents to avoid any discrepancies.
- Stay updated with the market trends and the offers and discounts during festivals or other occasions that can provide a fair deal to agree upon.
After the application is submitted, the bank will review the application, look at the documents, and process the application further. Based on the bank’s criteria, your eligibility, and the evaluation of the documents, the bank will decide whether to lend the loan.
One should be clear about the type of car they want or whether get a new or a secondhand one. Visit various banks, if necessary, to find out about their car loan plans. Choose wisely else you will get into debt. Go ahead to get your dream car.
