Tips for a New Car Loan in India

Most Indians use public transport. While it is a nice thing, having a car is also as important. It always helps have a hassle-free journey. The problem remains the inability to buy a car. Paying the lump sum all at once becomes difficult. When the going gets tough, the tough get going. A secured car loan is the best solution for Indians who cannot afford to buy their dream car. This article will help prospective car buyers make the right auto loan decision.

Loan lenders usually give a time period of 5-7 years for repayment. If you are able to repay the amount, why not go for it? The lender will ask for any of your assets as security or may even keep your car documents. It will be returned immediately after repayment. But it is very important to know the value of your dream car, if you will be able to repay the loan on time, and also the value of the collateral.

In most of the cases, car loans are secured and your new car will be taken as collateral. Your car will be repossessed by the lender only if you fail to repay the loan. The interest rate of the secured loan is also very low compared to unsecured loans. The loan approval is got quickly and easily, and, a lot of flexible repayment options are available. However, if you are availing a bad credit loan, the interest rate may be slightly higher.

Car loans are of two types. One loan carries variable interest rates and the other would be the adjustable-rate car loan. A loan with variable interest rates would mean that you and the lender have agreed to have the interest rate changed with time. Based on the amount remaining in the course of repayment you pay the interest. This will continue till full repayment of the loan is done.

The second and the most disliked loan type is the one with adjustable interest rates. The borrower is allowed to pay a lower interest for a certain period in the course of repayment, and then, the rate goes high as per the originally agreed interest rate.

Applying for a car loan in India is not as difficult as everyone thinks. Neither does it take too long. Most lenders finish off the initial process in a day or two. However, you need to be very careful with the paperwork and read the terms and conditions carefully. Do not hurry and take some time to research online. Interest rates usually show very steep curves while comparing lenders. Get quotes from as many loan lenders as possible and go for the auto loan with the lowest interest rates.

Loan papers are usually filled with twisted terms and conditions. Bank lingo is also an essential part of their papers and most of us do not understand them. But take your time and go through the papers carefully searching for hidden fees and charges. Spending some time on the paperwork is worth the trouble and can save you huge sums of money.


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