1. How will I get a car loan?
You can compare the best offers from various banks and apply online within no time. A bank staff will approach you later to process the loan as per your eligibility.
2. What is the maximum amount I will get as a vehicle loan?
Almost all financial institutions offer up to 90 per cent of the car value as auto loan. However, the final value might vary by lender. They will check factors such as vehicle cost, type and value in the second hand market, etc. while deciding the amount of loan to offer. In case of a new car, the borrowing capacity of the individuals will also be taken in to consideration.
3. What are the documents required ?
You have to to submit your identity, address and income proofs along with the loan application.
4. What is the processing time?
After submission of the documents, it will take about 3-7 days to process the loan and getting it sanctioned.
5. Can interest rates be negotiated?
You can negotiate on interest rates, as interest rates for car loans are not fixed. If you are loyal customer to a bank and have made regular payments for previous loan(s), they might consider and revise the existing interest rate for you.
6. Can I have an option to choose the type of interest rate?
There are two types of interest rates – 1.fixed and 2.floating . You can choose the bank/financial institution which offers the one you require.
7. Is it necessary to have an account with the bank from which you take a loan?
Normally banks will not raise an objection in giving auto loans to people who do not have an account with them. However, there may be some privileges you may enjoy, if you are having an account with the same bank you take a loan from.
8. What is the normal tenure for a car loan?
Typical tenures for a car loan ranges from 1 to5 years. You can opt for a lower tenure loan if you can pay a higher EMI (equated monthly installment) ) or a higher period loan if you cannot pay high EMI amount. Some lenders also offer loan tenure up to 7 years.
9. What are the chances of rejecting a loan application?
If you have a bad credit score, your loan application may get rejected. This will happen, if you have applied for loans or credit cards multiple times, defaulted on EMI payments, etc. If you are applying for loan for the first time, other factors such as income, organization, etc. will be considered.
10. How to pay EMIs?
You can pay EMIs either through post-dated cheques or request the bank to debit your account every month through Eelectronic Clearing System.
11. What about pre-closure?
Generally in car loans, you are not allowed to make partial payments. Even though you can pre-pay the entire loan after 6 months to 1 year. But, make sure you check with your bank upon this rule. If you are opting a pre-closure before the actual loan period, there will be a pre-closure charges of 2 to 4 % on the outstanding amount.
12. What if I miss to pay EMIs on time?
You should make EMI payments regularly. Most of the banks will allow you to miss one or two payments. But, you may be treated as a defaulter. Keep in mind that they have the authority to seize your vehicle. Also, missing a payment will affect your credit score, which will reduce your chances of loan eligibility in the future.
13. Can I get loan to purchase a second hand car?
Yes, financial institutions offer loans to purchase second hand/used cars. Interest rates would be higher for such vehicles. Factors such as repayment capacity, car value, etc. would be considered as they do for a new vehicle.
14. Can I sell my car before I repay my loan?
NO. You can sell the car only after repaying the loan. An NOC from the bank is required to sell the car.
15. Will I get a temporary relief from paying my installments?
In some cases you can get a relief from paying installments. For that you have to inform your bank in advance. This will be for a few days and you will have to pay delayed payment charges.
16. What happens if my cheque bounces?
Cheque bouncing is a criminal offense. Legal actions may be taken against you and your credit profile could be seriously affected.