Blog #carloan

Here are some of the steps that you can follow to lower the EMI or the interest rates on your car loan: - 

1. NEGOTIATE ON THE CAR PRICE:   The first thing that you must try is to cut the price of the car. You should try different lenders before you finalize one. If you try this, you can get free accessories too, like the engine lamination, the rust painting, or the free leather seat covers. These do not cost much to the dealer, and even the lenders in the car servicing business can also provide you some free accessories. Also, you can avoid getting the car insurance from the lender as you can get it at a much lower price online.
   
   
2. LOOK OUT FOR THE NBFCs FROM CAR MANUFACTURING COMPANIES: NBFCs are the Non- Banking Financing Companies and they can provide you really good loans and the best deals on the loans can help you to save money. Also, you can wait for them to tell you the offers and then tell them about the loan.
   
   
3. NEGOTIATE WITH THE LENDER: -  You can negotiate with the banks or the Non-Banking Financing Companies to get a car loan. It will help you to get a car loan with lower interest rates. Also, the burden of the outflow of cash will be reduced. You can check and compare different banks and money lenders and then select the one.
   
   
4. MAKE BIG DOWN PAYMENTS TO CUT THE EMIs: -  Down payment means an amount of money you have to pay initially. You have to make this payment when purchasing the car, and the rest of the amount will be covered in the Equated Monthly Installments (EMIs). You can make a large amount of down payment, and then, the burden of the EMIs will be reduced. If it is possible for you, then you can pay half of the amount of the price of the car in the downpayment, as it will lower the amount of EMIs and the tenure of the repayment of the loan.
   
   
5. EXTEND THE TENURE OF REPAYMENT: -  The repayment tenure of the loan is inversely proportional to the rate of interest. So, extending the tenure of the repayment of the loan will lower the rate of interest on the loan. So, you can avoid the high EMIs on your loan by selecting a longer tenure. The amount of the EMI can be checked with the help of a car loan EMI calculator.
   
   
6. PREPAY YOUR CAR LOAN: This can also be done to lower the rate of interest on the EMIs. If you get a promotion or your salary will be hiked up during the tenure of the loan repayment, you can use that amount of money by prepaying all or even a certain portion of the loan. It will bring down the value of the principal amount and the duration of the tenure of repayment as well. This will, in turn, reduce your interest liability.
   
   
7. LOOK FOR A LENDER WHICH CHARGES NO PROCESSING FEE: -  Comparing, contrasting, and researching is the key if you want to get a loan with lower interest rates and high benefits. You can check different money lenders and inquire about the processing fee. This processing fee does not affect your EMI, but it will reduce the cost of the ownership.

CONCLUSION:  A car loan is a secured loan, and unlike unsecured loans, it has a lower interest rate. The interest rate on a PNB car loan starts from 8.75%. However, by following these steps, you can avail of a car loan with the lowest interest rates and maximum benefits. A person can easily apply for a car loan as the documentation is easy and minimal. Also, the whole procedure is simple and easy. After successfully verifying the documents and the vehicle that you want to buy, the loan will be sanctioned to you.

Also read this: COMMON MISTAKES THAT A BORROWER MAKES BEFORE OBTAINING A CAR LOAN 

There are a lot of people who do not know much about car loan and are vulnerable to some mistakes. Therefore, to ensure that a borrower does not make any mistake before obtaining a car loan, here are some of them to make you aware: -

1. NOT SELECTING A SHORTER TENURE-  A borrower should opt for a shorter repayment tenure rather than going for a longer tenure. A borrower does this in order to lower the interest rate, but he ends up paying a lot more than the actual price just because of the selection of the longer tenure. The loan repayment tenure and the rate of interest are inversely proportional to each other, so a borrower tends to choose a longer tenure of repayment to get a lower rate of interest, but it is not beneficial at all. A borrower should choose the shortest term that he is comfortable with in order to minimize the interest outflows and maximize the benefits of the loan.
   
   
2. NOT SHOPPING AROUND- The smartest and the most important thing that a borrower has to do before applying for a car loan is to research and do all the homework before applying for a loan and even before selecting a vehicle. Selecting a good four-wheeler on a good deal is very important, but arranging reasonable and affordable financing is much more important. Most of the car buyers only focus on the car that they are buying and not on the best deals for the car loan. A borrower must check all the options and the available benefits and then select the car loan, which has the best interest rates and the best features.
   
   
3. ONLY FOCUS ON EMIs- Most of the borrowers tend to make this mistake. The only focus of them is on the Equated Monthly Installments (EMIs). Some of the car loans offer smaller EMIs and longer tenure of repayment. The one thing that we need to know is just because the EMI looks reasonable and affordable to you, at first sight, does not mean that it is the best option. You need to look at the big picture and all the other aspects too. A borrower has to check how much is the interest that he will pay in total and everything else before selecting a particular option. You cannot make a decision only on the basis of the amount of the EMI.
   
   
4. SELECTING THE  NO DOWN PAYMENT OPTION-  This is a common mistake that the borrowers make. Down payment means that you have to pay a certain amount of money at the start of the loan to get your car. However, in some of the loans, there is a ' no down payment option, where you do not have to make the down payment. This option sounds tempting but is not beneficial in nature. This is because the option of no down payment implies that the borrower will have to pay more on the EMIs in the future. In addition, the amount will be higher because there will be a higher interest rate on them. Also, there are some fees and hidden charges that the borrower does not know.
   
   
5. NOT CHECKING THE ONLINE PLATFORMS: - This is one of the biggest mistakes that a borrower can commit. You have to check the online platforms too, maybe because they will be more easy and affordable. Getting a loan online is easy as compared to the offline mode. You need to check the deals as it is important. Bank of India Car Loan has attractive interest rates.
   
   
6. BUYING A LOT OF UNNECESSARY SERVICES- Most of the banks or money lenders offer some additional services to the buyer. It may include life insurance schemes, warranties. Though all of these services are beneficial, you should check heir every aspect before applying for a loan.

Also read this: Best Things Of The Car Loan 

Car loans are benefitting a lot of individuals more often than not, they're a speedy method however it doesn’t mean you must take the loan without the proper amount of thought and knowledge. The most effective car loan is the one that makes you profit and/or the one that doesn’t leave you broke at the end of the tenure.

Here are some necessary things which may assist you to take the loan that befits you.

Factors to be thought-about,

Loan Tenure: Tenure quantity is the amount of time you avail of the loan. Most banks and NBFCs' most loan amount is eighty-four months i.e. 7 years. The tenure affects your rate of interest vastly, if your tenure is for long, the monthly charge per unit is a smaller amount, while increasing the whole interest you pay, whereas the shorter the tenure higher the charge per unit. Therefore you must calculate the money you're willing to pay because of the EMI for every month.

Rate of Interest: Equated Monthly Installments(EMIS) are a vicinity share of the principal quantity you avail. they're to be paid monthly without any due, as failing to try to do would only increase your dent. There are 2 sorts of interest rates, floating and fixed. The floating charge per unit varies in accordance with the finance market and is best suited to short tenures, however, the budget coming up with is troublesome and includes high risk. The fixed interest is unchanging over the tenure and involves significantly less risk.

Down payment and Principal amount: Most banks and Non-banking Financial institutes(NBFCs) supply ninetieth of the automobile price and few even fund the complete cash for the car. However tempting it is, economists and financial advisors suggest a minimum of 20% coming from one’s pocket is better as it decreases the whole loan quantity to be paid at the tip of the tenure conjointly obtaining a probably low-interest rate.

Prepayment fee: Most banks and NBFCs charge zero % of the loan quantity, however, some banks and monetary institutes charge 4%-5% of the principal. This issue ought to be deeply thought about if you've got the concept of ending the loan terms before the original date. If so, you must avail loan from the bank that charges you the smallest amount.

Processing fee: The processing fee is the charge that the majority of banks and NBFCs charge for processing and fulfilling your application. It's principally 1% of the whole loan in several banks and fixed rates looking at the tenure in few banks.The banks have sure criteria that the person has got to fulfill before it sanctions a loan. Above are crucial things to be thought about on a bank, below are the prime factors to be thought about by the loaned on one's self.

Document Requirement: The person ought to have necessary documents like ID proof, address proof, and financial gain proof for a salaried, self-employed individual, and self-employed non-individual(partners). The business applicants additionally to the preceding documents should have proof of shop commencement certificate or SSI/MSME certificate.

Credit score and debt-to-income ratio: The person must have a minimum credit score of 700 to avail a car loan, the credit score could increase or decrease even after availing of a loan. The debt-to-income quantitative relation is that the applicant’s quantitative relation between earnings and spendings.it has to be minimum to avail a car loan.

Conclusion
There are manifold banks everywhere providing trustworthy services often. The HDFC car loan is renowned and has satisfying customers. A car loan could be a versatile and convenient loan however if not well paid and used it'd hinder any probabilities of an availing loan in the future.
Also read this: 5 Reasons To Prioritize Top-Up Loans above Car Loans 

Have you ever wondered how a financial institution or application gets to know in an instance that you were late to pay the EMI of some loan you took maybe years back? Or maybe you have been paying all your dues on time which made your credit score rise high and makes you eligible to avail special rates on any loan service. All of this is possible because of my Credit score. The centralised storeroom for all financial lending records or all individuals availing such facilities in our country. A credit score of 700 or above is generally considered a good score and a score of above 800 is considered excellent. But how does having a good credit score make a difference? Well, suppose you are planning to avail yourself of a car loan and your contact to any bank or financial lending institute the first thing they will do is not to check your documents or anything but to check your eligibility to avail the loan through your credit report. If your credit score is good according to the bank’s policies then you are eligible to avail of the loan and if you are having a low credit score the bank might reject your loan application. Also if you are having an excellent credit score you might be offered a loan at a lesser interest rate than others. This happens because you are having a credit score that is higher and you are not at a risk to default on your future payments to the bank so they provide you with a better interest rate to promote you to avail the loan from them.

Yes Bank for example has some of the most convenient and affordable interest rates to attract borrowers. They offer loans for two-wheeler, four-wheeler and pre-owned vehicles to customers with simple, quick and easy documentation with doorstep assistance to serve better. Also just like every other bank they too check your eligibility to avail of the loan by cross-checking your credit score. A good credit score is more likely to get you a better offer on loans. A good credit score is also a factor that could determine the tenure of your loan. In short, a good score means you are a reliable and timely due payer which are the qualities that are most desirable by banks. Paying your EMI’s on time contributes to the growth of your credit score and vice versa. Every EMI payment and defaults are recorded in the credit score calculation. If a person defaults too many times on his/her EMI’s the credit score department might blacklist the person from availing any loan from any lending institute to prevent further defaults and subsequently even after a few defaults if the person gets back on track and pay dues timely the credit score will start improving. Therefore, a credit score is very dynamic. Just by getting to know your credit score, you can interpret your credit availability. With a good credit score, one can also avail of special credit cards which are highly rewarding and come with many benefits and even your existing credit card limit can be increased in case of your credit score improving. Borrowers with a good credit score are also provided with a pre-approved loan offer. Generally, banks offer pre-approved loan to their existing customers which have a good credit history. Therefore to avail of all these exclusive offers and rewards having a good credit score is crucial.


Conclusion: 

A credit score is one of the most important factors that determine your eligibility and offer of a loan from any financial lending institute. Having a good score is important to avail not just long term loans but also short term and personal loans too. A credit score is like a three-digit financial report card that can tell your past and present lending reports.

Also read this: Unique Features Of Banks 

A car loan is a loan where a buyer borrows the money from the lender and returns it in fixed monthly payments. While taking the car loan the buyer agrees to pay back the full loan amount and also the interest amount. All car loans are of specific time. Mostly, the car loan is fixed at 36,48, 60, or 72 months. The buyer can choose the tenure of the loan as per the convenience. Car loan can also include a variety of fees and taxes which are automatically added to the loan amount. After signing the car loan agreement the borrower gains the right to drive the car and also possession of the car. Technically, the lender or the bank owns the car until the borrower has finished paying off the entire loan. At first the car loans were of a short period of time from 24 months to 36 months. But In recent times, the period has increased. Now people can take car loans up to 72 months. Like the other loans, car loans have also increased its popularity in recent years. Many people are taking car loans to buy new cars.

ICICI Car Loan can be availed easily with minimal documents required. ICICI banks offer an interest rate on a car that ranges between 10.75% to 12.75%. Also, the interest rate offered on new cars is 15.50%. Key features of ICICI car loan are the bank provides longer tenure up to 7 months, minimal documentation, and low processing fees. Documents required for car loans are application forms, KYC for address proof, ID proof, age proof, proof of employment stability, and income proof.

Benefits of car loan:-

No collateral needed: For car loan collateral is not needed. This is because in car loans the car only serves as the collateral. If the loan amount is not paid by the customer the car can be seized. The tenure can be selected as per the convenience of the buyer. The tenure can be for a longer or shorter duration as per the needs of the buyer. Fast loan processing: With minimal documentation the processing of the car loan is easy and can be done in a shorter time period. Lower interest rate: As compared to other loans, car loans have the lower interest rate. Flexibility to choose the payment mode: The buyer can choose the payment mode as per the convenience. Flexibility in choosing the interest rate options. Additional collateral is not required while taking a car loan. Prepayment facility is available while taking a car loan.

Conclusion

Car loans can be very easily availed in today's time with minimal documentation. Car loans have become very common these days. As many people are turning towards banks or dealers for car loans. Nowadays, in recent trends people are also buying cars online. As shopping for a car online allows consumers to compare interest rates from a wide range of lenders. Car loans have now made it easy to own a car simply by applying for a loan which can be easily paid in monthly deposits. There are several ways one can buy a car from the borrower. A buyer can borrow a car through direct lending and also through dealership financing. You can also compare terms from different lenders or the banks and can avail the best possible deal for buying a car.

Must Read:- HOW TO GET LOWER INTEREST RATES IN A CAR LOAN? 

Some lenders or banks pretend to the customers that availing  a car loan is an enormous task; people can not get a car loan quickly. They have to wait for a more extended period of time to get the car loan, or the process is very long; after applying this type of words, they make extra money from the customers as a gift. But this is not the right thing, and every individual has the right to get a loan; if they fulfil the criteria, they will get the loan without any so-called gift cheque. 

Nowadays understanding a person’s mind is very difficult, to gain a profit they can do anything. Nowadays, some people are so cruel that they misuse someone’s money and their emotions too. Fake lenders or fraud banks spread their trap all over the world. So first, identifying the genuine, proper lender is the main task.

 
To find out the real lender who actually helps people to get their loan is a small process. In the era of the internet, everything is next to our hand. First, type their car loan lenders and search; you will get a long list of lender’s names. Do not go for any so-called lender; check out which characters are familiar to you, then go to their sites and check the customer’s review. Customer review is the main criteria for choosing the lender; after reading all the reviews, go to the lender’s background details. The company’s actual name, from where the company belongs, when the company established, how long they are in the service, with which companies they have collaborated. After knowing everything, if you find the lender is genuine, then only go for it.

 
Checking any lender’s details is not everything to taking a car loan from them; you must meet the criteria that they offer for a car loan borrower. Usually, all lenders criteria are overall the same, no fancy anything. But some requirements also differ from one lender to another lender, some banks to another bank. Must check which lender’s criteria goes with you well.

Here we have to take one lender’s name because they are a well-known loan lender in India; the lender is HDFC bank. HDFC bank is one of the most prestigious and oldest banks in India. They have numerous products for people, not only that, their actual good thing is their customer service. They provide a good amount of service to their customers, not only in their branch even online also. They are always there to help their customers; satisfying custom’s needs is their primary motive. They always guide their customers online as well as by phone also.

The eligibility criteria of a car loan are very simple, and they do not want many more things to apply for a loan. They need only proper documentation after submitting the documents; if they find the records are correct, the applicant has not to worry about the rest of the work done by the bank. It takes hardly 10-15 minutes of the car loan approval; after the consent, the following procedure will start quickly.

 
HDFC Car Loan is one of the best sources for availing car loan, and their product is always upto the mark. The interest rate of a car loan is also proper; they always maintain the RBI’s (Reserve Bank of India) guideline, so anyone can trust them to pay them the interest rate for a car loan.Not only the interest rate, but they also do not charge anything extra for a car loan. They have no hidden charge for their product, and they always maintain the actual interest rate for every product. Before applying for the car loan, always check the HDFC car loan EMI calculator; it will give you the overall idea of how much you have to pay for the entire car loan. Apply for your car loan now.