Blog #Car Loan

When India confronted the spread of the covid-19 pandemic, the economic distress also enhanced. Currently, loans have become a crucial part of individuals’ lives that aid them in sailing through the tough times and fulfilling the needs of their family and maintaining the standard of living. Many people use credit cards and have not taken up any loan beforehand. Nowadays, a car has become a must-buy commodity for any family, and people who do not want to spend the entire amount in one go generally take a car loan. So, most people face whether to choose an online car loan or an offline one. 

If a person chooses an offline car loan will have to visit the bank branch or the lender’s office eventually and submit an application form with other required documents. The same procedure is followed even after a person conducts initial research online. In an online car loan, the entire loan process from applying the loan to the disbursal process; everything is done online through the internet. First, the required documents for verification of the borrower's credentials are submitted digitally. Then the scrutinisation is done by the Bank or NBFC accordingly, and then the loan amount is also credited to the savings bank account of the borrower via online transfer. This further provides multiple options to the borrower, which are just a click away.

Generally, the documentation process of any loan, including a Bank of Baroda Car Loan or car loan from any other bank, is quite lengthy, and no one is willing to take the stress of the long-drawn process. So when a person chooses to get a car loan online, there is a basic set of predetermined and specifically mentioned documents on the website that the borrower needs to provide. These documents are required to be scanned and uploaded in the online portal along with the online application. Therefore, the offline car loan documentation process is mostly tiresome and lengthy, and mainly they required multiple copies of it.

An offline, personal loan procedure furnishes a personal touch in proper interaction with the financial institution like bank or NBFC, or the company officials. Therefore, people who are good at using Technologies like computers or online portals may feel comfortable and save a lot of time in the application procedures online. But some people are not even able to operate online car loans, so visiting physically the bank branch is preferred. There is no requirement to find time to meet someone on an online car loan. The application can be done even at midnight. Therefore, online car loans are a quick solution when people are in need as no personal interaction is not required in it. 

There are chances of getting inadequate information or risk of misinformation and buyers when any loan seeker gets the help of an external agent for offline car loans. Agents mostly try to push the products that benefit them but are not that good for the customers. But in online car loans, people can conduct research themselves and not have to rely on another person to compare loans or calculate EMI on the official website of all the lenders. The monthly instalments of a car loan can also be calculated with the help of a Car Loan EMI calculator provided on the official websites of most Banks or NBFCs. 

It takes a few days to process a  car loan offline,  as documents must be verified personally. If the documents are inadequate, the applicant is called and is instructed to furnish the additional required documents, and this way, the process gets delayed. So people who want a car loan instantly should choose to apply for it online as the entire process from application to disbursal could be over within an hour. To fill up all the details on the online site, it hardly takes a few minutes. But the offline car loan application can benefit the borrower with some additional benefits and value-added services such as reports, discounts and deals, which can save a reasonable sum of money.           

Read More:-  WHAT SHOULD YOU KNOW ABOUT CAR LOAN

SECURED CAR LOAN:- 

A secured car loan is a method of purchasing a car by giving your car as collateral to the bank. However, in this option, the borrower will be in possession of the car, and in case the borrower can't repay the loan amount, then the bank will seize their car and sell it at an auction to recover the loan amount.  Although, a car loan has always been a go-to option to purchase a car in India. There are two types of car loans that are available in the market. So let's learn more about both options in detail.

A number of banks, financial institutions and NBFCs provide the facility of a secured car loan. It is the most popular and smartest way of getting a car through a loan. The interest rate charged on secured car loans is very low because your car will act as collateral for the bank. Missing even a single instalment can affect your credit score. This will leave an impact for six years on your credit report and credit repayment history. And if the borrower can't repay the loan amount, then the bank will seize your car. So it's essential to repay the instalments of car loan EMI on time.

Banks give customers the flexibility to choose a loan repayment structure and tenure according to their budget and income. So borrower's can calculate the EMI amount according to their expenses beforehand using some online tools like a car loan calculator and then choose a tenure and structure according to their requirement and repayment capacity.

ADVANTAGES OF SECURED CAR LOAN:- 

1. LOW-INTEREST RATE:- The interest rate of a secured car loan is comparatively less. As it is a secured loan, your loan is backed by collateral (i.e. your car). So the rate of interest on secured car loans is comparatively lower than secured car loans.
   
   
2. EASY LOAN PROCESSING:- The entire loan processing of secured car loans is very easy, quick, effortless and hassle-free. As stated by the bank, the eligibility criteria are very lenient as one can quickly meet the eligibility criteria and submit all the minimum required documents to get funds from this loan.
   
   
3. LOAN AMOUNT:- You can borrow a huge amount from a secured car loan at a low interest rate because your car will act as a security for the bank.
   
   
4. INCOME REQUIREMENT:- As this type of loan is a secured loan, so your car loan is backed up by the car you're purchasing. So unlike unsecured loans, you don't necessarily need to have a high income to get your application approved.
   
   
5. LONGER LOAN REPAYMENT TENURE:- Customers get an extended repayment tenure for this type of secured loan. So you can repay the loan amount you've borrowed within 12 to 60 months. A number of banks offer this loan facility for up to 84 months.

UNSECURED CAR LOANS:- 


As the name suggests, this type of car loan is an unsecured loan. So you don't have to offer any collateral to the bank. To apply for an unsecured Axis Bank car loan, an individual should have a solid financial background, financial history and a decent credit record. 

ADVANTAGES OF AN UNSECURED CAR LOAN:-
 

1. CAR IS NOT AT RISK:- If you're applying for an unsecured car loan, then your car is not at risk. Because banks will seize your car if you can't repay your secured loan amount, but that's not the case for unsecured car loans.
   
   
2. QUICK ACCESS TO FUNDS:- You can quickly get funds disbursed to purchase a car of your choice. The entire application process of an unsecured car loan is very easy, quick and hassle-free.
   
   
3. LOW-INTEREST RATES:- The interest rate of an unsecured car loan is comparatively higher than a secured loan. But you can negotiate your interest rate and lower it even more if you have a decent credit score. Having a good credit score will also help you to avoid a number of charges. There are various banks that provide the facility of secured and unsecured car loans. So check your requirements, needs and capacity before making any decision. 

Also Read this:- Role Of EMI Calculator In Car Loan 

To begin with, all the terms are long haul just as an extremely momentary which are exposed to the field of the vehicle credits are only the residency periods. All the borrowers just as the clients have the full opportunity to choose whatever they are exceptionally more OK because of and keep them all out reimbursements they ought to make. In such instances of the vehicle credit, reimbursement is generally founded on the type of speculations that are additionally paid on a month to month standing by all the borrowers. So typically, a considerable lot of individuals regularly have their questions just as get befuddled about picking the vehicle advance span. Allow us to make one thing clear to you, both the terms have equivalent advantages just as impediments, so all the borrowers should investigate their pay just as all the reserve funds at whatever point indiscriminately settling on one among both of them. Anyway, to give you somewhere in the range of a reasonable agreement and to remove the disarray to a portion of the degrees we will presently let you all think about the professionals just as cons identified with the exceptionally momentary term for the loan on cars.

The absolute first thing is one can take or select a vehicle credit for a transient term and there is no uncertainty in that. Presently additionally going to the momentary advance, they are generally liked for their extremely less time span and furthermore they bear exceptionally low-loan fees at whatever point contrasted with that of the drawn-out term. So, in any capacity, all the borrowers and the client's post for the vehicle credit with a low-financing cost and demonstrate these transient vehicle advances are the best model. Presently let us take a portion of the instances of this Canara bank car loan interest rate and it offers the vehicle advance for certain months, months, etc.

Presently, this is additionally viewed as a brief period that can be selected particularly for these vehicle credits. This is viewed as not being entirely practical in light of the out month to month expanding instalments just as absolute expenses. Be that as it may, these kinds of vehicle credits may accompany low-financing costs which can be just about as low as a level of almost four percent on the advance sum. Indeed, this can be viewed as in the mid-scope of both long just as momentary terms. Furthermore, from the perceptions and records, this is the extremely most favoured sort of credit term by numerous individuals of individuals. As the name proposes, the pace of interest and furthermore the regularly scheduled instalments are practically sensible and lie alongside the midrange classification. 

Through this sort of vehicle advance length, the all-out instalment can be made in an extremely quick manner at whatever point contrasted with the drawn-out terms. What's more, these kinds of vehicle advances are likewise viewed as danger liberated from long haul advances. This is on the grounds that, because of the tragic conditions a significant number of individuals frequently stall out with all the obligations, and at whatever point they pick transient credits, this is adequately apparent to escape the heaping obligations quicker than expected. So transient advances are consistently on an extremely more secure side as far as to complete reimbursements. At whatever point we take a gander at a portion of the moneylenders offering a credit period for practically extremely more months and this is probably the most ideal ways like that of the months yet there may be a slight expansion in the loan fee from the bank's side in the long run.

Car Loans have become quite popular in the past few years in India. Many people require a car to commute from one place to another. Earlier cars were used for luxury like traveling but now Cars have become a necessity. The need for Cars in India has increased significantly with the advent of urbanization in India. 

The interest rate offered in India usually is 7.25% per annum onwards. Generally, the Loan tenure for Car Loans is anywhere between 1 and 8 years. The processing fees for the application procedure of Car Loans depend upon the Bank you wish to apply to. Car Loans are secured Loans and hence have an attractive rate of interest offering for their consumers.

Eligibility Criteria:

The criteria that are required to be fulfilled by the applicant for the application procedure of Car Loans include the following:

• The applicant’s age should be at least 18 years and below 75 years of age. 
• The applicant should have a monthly income of at least INR 20,000.
• The applicant must either be self-employed or be employed with the current employer for at least the past 1 year. 
• The applicant must be working for a government or private institution or should be self-employed for the past 1 year.

These criteria may vary as per the Banks you apply to. You can estimate your monthly EMI payments with the help of online Car Loan EMI calculators. The requirements for the use of these calculators include the Loan amount, Loan tenure, rate of interest, and processing fees chargeable by the Bank.

Documents Required:

The following Documents are required for the application procedure for Car Loans in India

1. Filled application form for the Car Loan.
2. Proof of Identity of the applicant.
3. Proof of Age of the applicant.
4. Proof of Income of the applicant.
5. Proof of Residence of the applicant.
6. Few Passport-sized photographs of the applicant .

Several Banks may demand few additional documents for the application for a Car Loan. A high credit score can increase your chance of getting the loan sanctioned by the bank or financial institution you applied to. You can check the status of your application via online or offline mode. 

A Car Loan can be the best option available in the domain of finance as these loans are secured and the car itself acts as a security for these Loans. Unlike Personal Loans, these loans offer a pretty simple application process, repayment options, and a lower rate of interest applicable on your loan, amount. These loans can help you in financing your Dream Car that you can you use to commute to various places. The Car that is being placed as the security of your Loan is not even yours. You are not putting any of your assets for the Car Loan application which is not the case in most of the finance options available in the Finance market. 

More and more people are understanding the importance of living a happy and comfortable life and thus even if they can not afford to own a car, they opt for Car Loan schemes to ease the process of transportation for them. You can research and compare all the Car deals available in the vehicle market and also the Car Loans being offered by Banks and other financial institutions in India. You can do your research via online or offline mode. 

The popular Loan schemes available in India for you include the following:

• Bank of India Car Loan.
• Bank of Baroda Car Loan.
• ICICI Bank Car Loan.
• Yes Bank Car Loan.
• State Bank of India Car Loan.
• Axis Bank Car Loan.
• Canara Bank Car Loan.

You can search for more such schemes online that can help you in comparing the offering available for you. The more you research the more able you would become in cracking a better deal and in decreasing your future financial burdens.

Also read this: Wrong Usage OF Credit Card 

Getting a car was once a dream of so many people. In today's time people's dreams are being fulfilled as anyone can apply for a car loan from any bank or financing companies. Almost all types of car can be easily availed through car loan. There are various schemes offered by the banks and financing companies which can be availed during the time of car loan. Additional discounts offered might help you save a lot of money. 

Canara Bank Car Loan can be availed by submitting required documents. The required documents are employment proof, address proof, income proof, salary slip, income tax documents, bank statements and many other documents as required by the bank. The interest rate and processing fees offered by the bank is quite reasonable. One can find all information regarding the car loan on the official website of the bank. 

Planning for a car loan is the most necessary step. One should always do planning before availing a car loan. A proper planning can help you save a lot of money. The car loan planning process is mentioned below

• Shortlist a Car:- This is one of the most important steps while availing a car loan. Before applying for a car loan one should always check the options from various ranges of cars. The loan amount depends upon the car you choose. Shortlist a car according to your budget before availing a car loan.
  
  
• Check eligibility of the car:- one can check the eligibility of the car from the car loan eligibility calculator. It is an online tool which can help you in checking eligibility accurately. Different cars have different eligibility. The eligibility criteria may differ based on the car you choose, your income and along your location. It is one of the most essential steps before applying for a car. One can easily check the eligibility of the car from the online website of the banks and financing companies.
  
  
• Down Payment:- one needs to figure out a down payment to be given to the lender after selecting the car. Down payment is one of the major processes in a car loan. As a good amount of downpayment may help you save a lot of money. The more the downpayment given the lesser the interest rate charged. One should figure out down payment according to the financial conditions.
  
  
• Tenure for car loan:- Figuring out loan tenure is a very important step. One should choose the loan tenure according to their financial conditions. There are various tenure options provided by the banks and financing companies. A borrower can choose the loan tenure as per the convenience. Shorter the loan tenure lesser will be the interest rate charged.
  
  
• Provide required documents:- After the above process one can now provide the required documents asked by the bank and financing companies. For availing a car loan one needs to provide minimal documents such as id proof, address proof, age proof, employment proof, income proof, bank statement etc. The documentation process may differ from bank to bank.
  
  
• Book your car:- After providing the required documents one needs to book the finalised car. After the loan approval is done one can easily get a car loan. 

Conclusion 

Car loans can be availed easily if the planning is done properly keeping all important factors in mind. One needs to be well aware of the entire process before applying for a car loan. One can refer to the above article for planning a car loan process. All the important factors regarding the car loan process are mentioned in the above article. 

Also read this: A Low-Interest Rate Credit Card 

Banks in India offer car loans with interest rates starting from as low as 7.25% per annum. The loan tenure offered by a majority of the Banks ranges from 1 to 8 years. The processing fees charged for the application process depend upon the Bank you apply to. A certain amount of the Car price is required to be paid by the borrower of the Loan in the form of a down payment. Few banks and financial institutions also pay the price for the Car for the borrowers fully.

Many car dealerships also provide their customers with the option to apply for a Car Loan with the help of some tie-ups with a few specific banks and financial institutions. The rate of interest offered in this case is usually higher than that which you can avail yourself of. Most Car Loans can even finance the 100% on-road price of the Car. This would have no down payment from the borrower. Certain Banks provide Car loans up to few Crores to their customers. These Loans are not specifically limited to the purchase of a new car. These can be used to pay for an Old Car as well. A high credit score can get you a lesser interest rate for your loan.

Some popular Car Loan schemes offered by India Banks and Financial institutions are -

• Bank of Baroda Car Loan
• Canara Bank Car Loan 
• Axis Bank Car Loan 
• Federal Bank Car Loan
• The State Bank of India Car Loan
• ICICI Bank Car Loan

Eligibility Criteria -

The application criteria involved for the application procedures of Car Loans are :

• The applicant should be of legal age at the time of application and below the age of 75.
• The applicant should have a net monthly income of at least INR 20,000.
• The applicant should be self-employed or salaried/employed for at least the past year from the current employer. 
• The applicant should be working for a private or government organization or self-employed.

Documents Required -

The Documents required for the application procedure of Car Loans include the following with Passport-sized photographs :

• Proof of Identity of the Applicant (Any of these: Aadhaar Card, PAN Card, Passport, Driver’s Licence, Voter ID Card of the applicant).
• Proof of Residence of the Applicant (Any of these: Aadhaar Card, Passport, Driver’s License, Utility Bills, Ration Card).
• Proof of Income ( Form 16, Salary Slips from the current employer, Bank statements of the past six organisations months, Latest Income Tax returns report).

In some cases, the Banks and financial institutions might demand certain extra documents and paperwork as per the Bank’s policies.

It is easier to avail of a Car Loan when compared with other loan options available in India. A high credit score is not required for the application process as this Loan is kind of a Secured Loan. The vehicle itself acts as a security of the Loan and can be beneficial for both the lending bank and the borrower. But, Car ownership is not provided to the borrower until the end of the Tenure of the Loan. You would also be required to pay a down payment to the car selling agency.

The key factors that can help you in estimating the monthly EMI amount include the loan amount to be borrowed, the processing fees charged, the rate of interest applicable, and the tenure of the loan. A  EMI Calculator for Car Loan can be used online to determine the monthly repayment with the help of the details mentioned earlier.

Also read this: How To Use Credit Card Safely 

Unemployed individuals can be businessmen or freelancers. This group of people don’t have a constant monthly income debiting to their account but are earning some way or other. Employed individuals are not the only segment of people that are eligible for a car loan. A car loan is like a personal loan in which interest rates are low because there is collateral pledged against the loan in the form of the car that is to be bought. The car itself remains with the buyer and can be used as per their need. The bank on the other hand holds some important document of ownership of the car. When a person fails to pay EMI’s ( Equated Monthly Instalments ) on time even after notice and reminders in that case the bank has the authority to call back the car. The owner can pay the dues and take the car back.

For this type of loan, banks are very flexible. They provide full and even partial funding in the form of a loan for the car. Car loans help people by providing funds for their car and accepting small payments for the same. Many banks also give zero% charge on foreclosure which means if the loan is to be settled by the borrower before the maturity of tenure there won’t be any charges levied by the bank. 

Some eligibility factors for self-employed individuals and professionals are:- 

1) The turnover of the business or individual should be above the threshold limit given by the bank. The limit might vary from bank to bank and on different cars to be purchased.

2) The individual should be above the age of 21 and below the age of 65.

3) The individual should be working for at least 2 years and 1 year if employed under someone else. 

Therefore these are the only basic requirements that a financial institution might need to provide an individual with a car loan. A car loan can not only help these individuals by fulfilling their dreams but also making their dreams affordable. After the loan is provided by the bank to the individual, he is liable to pay an EMI every month. An EMI is a part payment of a loan that includes the person’s interest liability also towards the bank. This EMI can be calculated by anyone without even applying for a loan by a tool called Car Loan emi calculator. This is a tool that can calculate the EMI liability of the person every month. One has to enter three values namely Amount which is the loan value sought to be taken, Interest which is the percentage of interest that would be charged by the loan offering bank and Tenure which is the time duration for which the loan is to be sought. Once all the values are inserted by the individual in the calculator the result is shown almost instantaneously. The result is the EMI that the person has to pay to the bank in case a car loan is taken according to the input values. Therefore car loan breaks the long going tradition of cars to be exclusive for only the rich. This loan enables even a normal citizen to dream of a car. Paying in small parts enables a whole new segment of people to buy a car. No down payment or full payment needed, just the ability to pay EMI’s is needed.

A car is not only for the rich and upper class. A car is not only for the employed and constant earners. Car loans ensure any capable person irrespective of their background or a constant source of income can avail this facility and get home their dream car.

Also read this: What Is The Eligibility for Credit Cards 

Car loans are the loans that are taken for the payment of the car which people buy. But it is not easy to pay the loan as the price is relatively high. Car loans are popular since they are convenient, but what happens if you don't pay them back on time? For obvious reasons, you do not want to default on your car loan. It will ruin your credit history and lower your credit score, and two, the bank may repossess your vehicle. There might be many reasons due to which you might not be able to pay the loan amount. This is called car loan default. This is the situation when the customer doesn't pay the EMIs for an extended period. If you cannot pay, then don't worry, there are many options available through which you can pay the money. Do not avoid the lender; tell them the reason; ignoring the loan provider might create suspicion.

There are many options available some of them are given below:

Talk to your lender/bank about extending the term of your Car loan. For example, if you had taken out a 36-month car loan, you may ask for it to be extended to 48 months. Your monthly commitment will be lowered as a result of this.

Inquire with your lender/bank about the possibility of making a deferred payment. It means you'll be able to postpone making your current month's payment until a later date. Explain to him that having a month's notice on the settlement will allow you to have the flexibility you require.

Try to persuade your lender/bank to change the payment due date permanently.

Late fees are frequently imposed on late payments. If you believe the accumulated late penalties are putting you under financial duress and preventing you from making timely payments, contact your lender/bank to waive the fees. The lender/bank may agree if it will assist you in making timely payments.

As previously stated, if payments are not made following your agreement, it is considered a default. The apparent consequence is that your car may be repossessed by the lender or bank. The lender/bank will give you a written notice of default, requesting that you pay the remaining sum on your Car Loan or face repossession, depending on your loan arrangement.

A repossessed car is frequently auctioned off to pay off your default loan balance. The auction information is well-publicized, and it is conducted in a commercially acceptable manner. Typically, the lender/bank notifies you or the defaulting client of the location and schedule of the auction so that you can bid or simply observe the sale. There are many available options if you are not able to pay the amount of loan taken.

Canara bank car loan are one of the best loan providers. They have many attractive features. The interest rate charged is very low. There are no hidden fees. The fees charged for processing are extremely low. The customer has the option of choosing the monthly instalments. The loan can be taken out for as long as 84 months. Individuals can get a car loan for both new and old vehicles. The loan is available for any type of vehicle and is not dependent on the model or manufacturer. In the case of second hand cars, the loan term can be as long as 60 months. If borrowers choose to pay off their loan before it matures, the bank will not charge them any fees. The majority of the car's value is financed by the bank. The processing fees are also less. It is 0.25% of the car loan that you have taken. Which is significantly less.

Conclusion: There are many methods to repay the car loan. It is not problem is you are facing any difficult paying the car loan. Don't give up early.

Also Read:-A Credit Card Is The Best Way To Pay Your Many Types Of Bills 

A car loan (otherwise called a vehicle loan) is an amount of cash a shopper borrows to buy a car. Car loans observe the majority of the same guidelines and methodology that apply to different loans. Much of the time, when purchasing a car, a borrower may apply for a car loan straight away; however, he can likewise utilize an individual loan (a loan availed by a person to use at their discretion) for a similar reason. Availing a car loan can be a tricky affair for first-timers, so here are some factors one should consider:

• Consider a shorter repayment plan: A minor loan tenure guarantees the total loan reimbursement quicker, thereby helping in decreasing the interest cost. Hence, it is constantly prescribed to pick the shortest possible loan reimbursement tenure.

• Please don't push your repayment ability: In-car loans, one can reimburse the loan in simple EMIs at regular intervals. To compute the repayment costs on your Car Loan, you can utilize an online car loan EMI planner to understand the payment pattern. Doing so will assist you with setting up your loan payment plan in a manner without much hassle.

• Check all services and charges: Other than handling expenses, a few different charges are imposed by the bank on your car loans, like late instalment charges and part instalment charges. These charges may shift starting with one bank then onto the next, which can expand the general expense of your loan. Henceforth, checking every one of them previously gets significant.

• Consider your budget: Your financial plan ought to be based on your month to month savings and the amount you need for personal use. One must also maintain a buffer for extreme situations.

• Check your credit score: Your financial assessment is determined by your capacity to repay a loan and your present credit circumstance. The better the score, the lower the interest demanded.

• Check for a pre-qualified loan: A thorough research can assist you with getting an instant Pre-Qualified Loan that prioritizes your comfort first. This saves you from the problem of visiting numerous banks/agents and picking a loan offer most appropriate to your necessities.

• Look and research for the best rate: To get the most extreme advantage of the car loan offers and markdown, you need to do careful exploration by looking at the numerous banks and car loan offers and afterwards getting the best one.

• Prefer working with a guarantor: A guarantor will empower you to get a car loan when you don't have an ideal financial record. An underwriter to your loan can be anybody from your family or companion. Ensure they should have a decent monetary condition and credit record.

• Check if a custom-fit instant loan suits you: Many banks, like SBI Car Loan, provide custom-fit loans, which are easier than all the other loans. One just has to give them the required information, and they will facilitate you with all the available loan options.

• Checking flexibility is a good practice: Flexibility here is of factors like repayment patterns, EMI variations and financing of the loan amount. These facilities make it very easy for the person who is applying for the loan and also negates his inexperience.

Conclusion: 

Car loans have become largely accessible over the last few years. Needless to say that there are a large number of benefits related to surfing for car loans on the web. For one, looking for car loans online permits buyers to analyze financing costs from a broad scope of banks in a moderately short measure of time, and hence allowing them to get the best possible settlement. Car loans, like all other loans, require very precise and vivid research as it is important to get the best settlement. After all, one doesn't want to wreck a deal as big as getting a car by getting in a wrong deal and handling the unparalleled stress.

Must Read:- Understanding Car Loan Lender 

So there's no fixed answer to how much down payment you should make on a car. Before making a decision you should consider these factors -

1. The first is to check if you're buying a new car or an old one. And only make decisions if you are financially stable or if the finances are planned out.
   
   
2. The second is to check your credit score; if your credit score is low, then you should be prepared to pay as much cash as you can as a down payment. It would make it easier for the lender to give you the loan because no one wants a risky customer. But if your credit score is high, then it would be a lot easier to reduce your down payment and reduce your interest. So if your credit score is 670, your interest will range around 10% or more, but on the other hand, if your credit score is 850, you can get an interest rate ranging between 3%-6%.
   
   
3. The third is to compare lenders or banks and see who fits in your category the best. Each bank has its own business model. For example; Bank of India Car Loan has divided interest rates among people who are salaried and who are self-employed.
   
   
4. The fourth is the most important one. When you visit the showroom, you might be tempted by the fancy brand-new sports cars. But only make decisions if you are sure that you can fix your budget accordingly and if you can pay the down payment once you've taken the loan and as well as the remaining principal amount along with interest every month.
   
   
5. The fifth is the more money you pay as a down payment; the less your remaining principal amount will be. And it will also reduce the interest. So you'll have to pay less principal every month, and the interest will be lesser too. It will also reduce the loan tenure. For example:- If the loan tenure was 60 months (with full principal amount), then after making the down payment, it might get down to a 48-month term.

So what happens if you're unable to make a down payment?

If you can't make a down payment, the interest rate will probably be high. And you'll have to pay a large amount every month along with the high interest rate. And if you're unable to make those payments every month, your car will be seized, and your credit score will fall down, which will make it harder for you to borrow money or take any loan in the future.

To avoid all this, I've stated some points below on how to save money for your down payment -

Save : 

Keep at least a minimum amount of 20% of your dream car's actual price. So that when you'll apply for a Car Loan, you'll be able to pay the down payment. 

Plan your budget : 

Prepare a budget list, where you can plan all your expenses along with your personal expenses and cut down all the unnecessary expenses. 

Create a goal :

Make a goal list to at least cut down a particular amount of expense, so if the down payment is INR 500000, map out how many months it'll take to reach that goal.

Cut unnecessary expenses : 

Take a big pause on making unnecessary purchases on memberships, clothing, household items. Only buy things that are really necessary and are your needs.

Conclusion -

Plan out your money, budget, and expenses before making any decision. It is advisable to go for a down payment because it will not only make it easier to lower your principal amount, but it'll also help you to reduce the interest rate.

Also Read:- What is the tenure period of a car loan?