Blog #SBI Car Loan

Car loans are of two types: secured car loans and unsecured car loans. A secured car loan is availed with the car as collateral and has a fixed interest rate for the entire loan term, whereas an unsecured car loan doesn’t require collateral and has both variable and fixed interest rates. An unsecured car loan is primarily for a low principal amount. A car loan is hassle-free and convenient to avail. The banks and financial institutes make sure that the loan is adaptable in every way. Before availing a loan, the individual should do enough research and have ample knowledge about banks and their offers.

1) The right lender: A loan is financial help, and practically it can be availed from anyone, starting from your next-door neighbor to everyone that comes along, but availing a loan from someone that doesn’t have a clear print on loan is risky and disadvantageous. That’s why to avail money, legitimate organizations like banks and financial institutes are present. Even among banks and NBFCs. The financier should be trustworthy and have numerous customers as they indicate their level of influence.  

2) Budgeting: You should consider your monthly income and spending level before going for a loan. The car loan still needs monthly payments, and you should make sure that you will be able to pay the interest on time without missing a single payment.

3) Car selection: Before standing in front of a financier, you should select the car you want and the money you can afford for that car.

4) Eligibility criteria: Every bank and NBFC has a certain criterion that the applicant must meet before availing of a car. The age requirement to avail of a car loan is between 18 years and 75 years, though most banks and financial institutes prefer the minimum age to be 21 years. The applicant should have a stable income or profit each month. The applicant should be a salaried individual or self-employed individual, or self-employed non-individual (co-applicants). The applicant must earn a minimum of Rs 3,00,000 per annum to be a borrower of the loan. The applicant should be working for a minimum of 2 years and at least one year with the current employer. The applicant should be able to fulfil all the above before applying.

5) Documentation: To prove that the applicant meets the eligibility criteria, he/she needs to submit documentation alleging those. The required documents are ID proof-PAN card, Aadhar card, Voter Id, driving license, passport (anyone is enough). 

a) Address proof: A government-authorized document verifying the applicant’s place of residence. It could be a PAN card, Aadhar card, Voter ID, driving license, passport (anyone is enough). 

b) Income proof: An official authorized document specifying the applicant’s salary. ITR, form 16, salary slips, or any other valid document mentioning the applicant’s income or profit.

6) Tenure: The loan term you are going to avail of the loan is tenure. Banks and NBFCs provide tenure for anywhere between 12 months and 72 months to avail of a car loan. But it is advisable to choose a shorter tenure as it reduces the interest amount on the whole.

7) Loan amount: Most banks and financial institutions provide loan amounts up to 90% of the car’s ex-showroom value, but few HDFC or SBI Car Loan provide up to 100% of the car’s ex-showroom price. Economists and financier advisers recommend at least 20% of the car’s value to be a down payment, an amount that isn’t from the loan’s principal.

8) Interest rate: Equated Monthly Installments(EMI) is the applicant’s monthly interest amount instalment to pay each month until the end of tenure. Depending on the loan amount you avail, the interest rate varies. The Car Loan EMI Calculator can be used to know the monthly instalment you’ll have to pay for the loan amount you take.

9) Car booking: If all the above suits you well and good, you can go to the dealer, recommend a car quotation, and take it to the lender to avail the money.  

Also read this: Car loan- Application process 

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