The unexpected arrival of the pandemic has brought significant shifts. The situation has changed drastically, especially the way we used to travel. While previously it was convenient to use public transport, it is not considered safe anymore.
Now, safety has become a priority spurring people to shift towards the use of private modes of transportation. While many people are looking to buy a personal vehicle to maintain social distancing during everyday travel, it is not feasible for everyone. Buying a car has become challenging during this pandemic. In such an event, a car loan can come handy for you to afford a personal vehicle and not disturb your overall financial health.
Many banks are offering car loan facility during this pandemic for their customers at lucrative interest rates. However, before opting for a car loan, you must know some specifics that can help you choose the best possible option.
Banks have an eligibility criterion for opting a car loan that includes income status and CIBIL score. To avoid car loan application rejection ensure that you meet these criteria. Apart from this, there are other documents required by the banks are:
Income proof which may include salary slips, latest income tax returns
Also, it will be beneficial to submit your credit score report along with these documents to avoid future confusions.
Before opting for a car loan, it is vital to compare the interest rates offered by various banks. With no standard rates in the market, even a slight difference in the rate of interest can have a significant impact on the repayment amount. You can contact car dealers to gain knowledge about the estimated interest loans provided by banks. Usually, they have a tie-up with banks and have an idea about the market rate. Evaluating the various options available will help you get the most suitable car loan.
EMI and Processing Fee
Nowadays, many banks provide EMI calculators on their websites. They can help you plan your monthly EMI based on the preferred interest rate for your car loan.
Also, you should check the processing fees as it differs for each bank. A comparison of these options can help you make an informed decision. Similarly, it is crucial to analyze the service tax, whether it needs to be paid as a one-time lump-sum amount or yearly.
Loan Repayment Tenure
A significant factor to be considered is the loan repayment tenure. It will be wise to opt for a shorter duration as loan as there is no stress on your monthly budget. Also, it influences both the interest rate and loan amount. The EMI payments might be less for a longer tenure, however you will be required to pay a higher amount as interest.
A common mistake which is generally made is taking a higher loan amount and paying less or no down payment while opting for a car loan. Not paying down payment can save you money in the short-term, but it has long-term consequences. It helps reduce the loan amount taken from the bank and doing so can get you a reduced interest rate as well.
After understanding these things about car loans, you can select the most suitable car loan deal. Reputable banks like Axis Bank offer lucrative car loans and can help you get your own safe mode of transport during these uncertain times. If you face any trouble understanding the deals, you can contact their customer care 24*7. Their credible support team will help you through the entire process!