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Written by Site Administrator
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Wednesday, 28 October 2009 06:55 |
A loan given to you by a bank or a financial institution when you are buying a vehicle such as a two wheeler or a car is called a car loan. Usually, agents of these financial institutions are arranged directly from the showroom from where you want to buy a vehicle. The bank agent will procure the necessary documentation for you and arrange for the loan.
Barring a small component of the price that you have to pay as downpayment, the rest can be arranged through banks as loan. When you buy a vehicle on loan, the showroom will be able to deliver your vehicle as soon as the loan is sanctioned on your name.
The loan provider (Bank or financial Institution) will keep the original papers of sale of the vehicle as security with them till the total amount of the loan along with interest is repaid. In the event that you default or are unable to pay back the loan, the bank reserves the right to claim ownership of the vehicle and may auction it to recover the loan amount. |
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Last Updated on Wednesday, 28 October 2009 09:54 |
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Written by Site Administrator
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Wednesday, 28 October 2009 06:59 |
The following people/institutions are eligible to apply for a car loan:
- Salaried people in the age group of 21 to 60 years
- Self employed individuals in the age group of 21 to 65 years
- Public & Private Limited companies
- Partnerships firms
- Trusts and HUFs
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Written by Site Administrator
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Wednesday, 28 October 2009 07:08 |
You must first decide how much you are willing to pay as downpayment. The remaining amount of the price can be obtained from the bank as car loan.
When calculating the loan amount many banks will allow you to include the charges based on make, model, accessories and so on. You may have to first assimilate all this information and come up with your final figure.
Note that though the banks are able to provide car loan, they cannot give you a loan for an amount for which your EMI exceeds 40% of your take home salary. Generally, you get upto 3 times your salary in the case of salaried employees and upto six times the net profit in the case of business people.
Some banks and financial institutions also provide loans for second hand cars based on their resale value. So you can also find out the resale value of a second hand vehicle in case you want to buy it on a loan.
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Last Updated on Wednesday, 28 October 2009 09:38 |
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Written by Site Administrator
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Wednesday, 28 October 2009 09:40 |
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Banks lend car loans for tenure ranging from 1 year to 5 years. Some banks may give up to 7 years for repayment. You may have to check with your loan provider to check which option is best for you. |
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Written by Site Administrator
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Wednesday, 28 October 2009 09:45 |
Full amount financing is available with some banks for select models and makes of new cars only. These loans are subject to additional terms and conditions pertaining to interest rates, prepayment charges, and so on. Though on the surface it may sound lucrative, it will have enough loopholes into which you may fall if you are not being careful.
It is better to check all the terms and conditions carefully before going for a fully financed car loan.
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Car Loan
