Car Loan: Know these important things before taking a loan to buy a car during festivals, it will be beneficial

New Delhi : The festive season has started in India. During this time, people bring new items to their homes. Many people buy a motorcycle or a car to make their journey easier. However, when some people are unable to manage the money, they remain heartbroken. If you also wish that you had a car at home, then the travel of your children and family would have become easier and safer. But, your pocket and financial situation is not allowing this. If not, then it doesn’t matter. In India, the cheapest and most durable car is available on car loan and you can buy it and bring it to your home. There are many banks in the country which provide you car loans at affordable interest rates. You can buy a car by making a down payment of Rs 1 lakh-50 thousand and bring it to your home. Come, let us know…

Which bank’s interest rate on car loan?

Before purchasing a car by spending less money, it is very important for you to know which banks in India are providing car loans at which interest rates.

  • Canara Bank – 7.30% to 9.90%

  • Bank of India – 7.35% to 7.95%

  • ICICI Bank – 8.82% to 12.75%

  • Indian Bank – 8.20% to 8.55%

  • Union Bank of India – 7.40% to 7.50%

  • Punjab National Bank – 9.40% to 9.90%

  • Central Bank of India – 7.25% to 7.50%

  • IDBI Bank – 8.40% to 9.00%

  • HDFC Bank – 8.80% to 10.00%

  • State Bank of India – 7.95% to 8.70%

  • UCO Bank – 7.70% to 9.30%

How many types of car loans are there?

Now if you have seen the interest rates on car loans provided by banks, then it is very important for you to know how many types of car loans are there in Indian banks. Let us tell you that Indian banks provide car loans to their customers at two types of interest rates. These have fixed interest rate and variable interest rate. Fixed interest rate is a car loan rate that remains the same throughout the loan period. This interest rate is not affected by market fluctuations. Whereas, variable or floating interest rate keeps changing and is affected by market fluctuations and changing trends in the financial market.

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What is the role of CIBIL score in taking loan?

CIBIL score is a three digit number. It ranges from Rs 300 to Rs 900 and shows a person’s ability to take a loan. This CIBIL score is also called CIR i.e. Credit Information Report. CIR or CIBIL score also tells you about the loan types and your credit repayment history across credit institutions over a particular period of time. Before giving loan to any customer, banks check his CIBIL score. If a customer’s CIBIL score is above 750, then he is considered most suitable for getting a loan, but a customer with a CIBIL score below this faces some difficulty in getting the loan. Many times, if the CIBIL score is low, a person is not able to get a loan from any bank.

Why is it very important to know about EMI also?

Now, if you are eager to take a loan after knowing so much, then you should wait for a while and know about the EMI also. It is important for you to know what is EMI and why is it important for loan takers? Let us tell you that the full form of EMI is Equated Monthly Installments. This is a medium to repay the loan. This is also called monthly installment. EMI works by gradually repaying the principal amount of the loan and the interest on the loan on a monthly basis. This continues until the loan is completely repaid. Every EMI has components of the principal loan amount and the interest to be paid. No decision to take a loan can be taken without knowing what will be the total tenure of the loan and what will be its EMI. Credit card score and credit history are helpful in deciding the loan EMI.

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Is collateral required for car loan?

Car loan is also called auto loan. Under this, the loan giving lender bank and NBFC (Non Banking Financial Company) agree to provide credit to the borrower. One of its basic objectives is to allow the customer to buy a car. This is a secured loan. Where the car you buy acts as collateral. Therefore, no additional collateral or security is required for a car loan.

Documents for Car Loan

Now that you know the important things for taking a car loan, we will also tell you the documents you will need.

  • proof of identification

  • proof of address

  • KYC documents

  • Proof of Income (Form 16 or 6 months salary slip)

  • Proof of age (minimum 18 years)

  • photograph

  • car documents

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