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Car loan helps fulfill one’s dream of buying a vehicle. Paying for a car is a big task which can be made easier by paying through financing. Car loans are provided by the banks or the NBFCs.
Some of the car finances available in the market are:
- HDFC Car Loan
- ICICI Car Loan
- AXIS bank Car Loan
Some of the NBFCs which provide car loans are:
- Bajaj Finance
- Mahindra Finance
The very first time, vehicle buyers generally think that obtaining a car loan from the car dealer is a good idea. The thinking is to save some amount of work which is not a good idea, in most of the cases. Generally, the dealers have a profit margin in these kinds of deals. The financing can be obtained from the banks or the NBFCs directly as this will help save some money in comparison to getting finance from a car dealer. Here are the different types of car loans:
New Car Loan
When buying a new vehicle, getting a new car loan is easy. The new car loans are provided for the tenure of a minimum 1 year and a maximum of 7 years. For new cars, banks provide up to 100% funding to the borrower. The amount of finance depends on the income of the borrower and the price of the car.
The other most important aspect of a new vehicle loan is the interest rate at which the finance is available. The car loan interest rates depend on the following information:
- The company where the borrower works.
- The interest rates depend on the segment of the car the borrower wants to buy.
- The interest rates also depend on the monthly salary of the borrower.
The above criteria differ from financier to financier. The eligibility for car loans is different for salaried individuals and self-employed individuals.
Features of new car loans
- Finance is available for up to 100%
- Reducing interest rates are available with easy EMIs
- Flexible tenure of up to 7 years
To get detailed information, please check:
Used Car Loan
- Car loan interest rates
- Car loan eligibility
- Car loan documents
Some people don’t have the capacity to by a new car but that doesn’t mean that they should be deprived of a car. One can always buy a pre-owned vehicle. And the finance for pre-owned vehicle is also provided by the banks like HDFC and NBFCs like Bajaj Finance.
Conditions for a used vehicle loan:
- The second-hand car loans are not available on cars which are older than 8 years.
- The finance is available for up to 85% of the amount of the car.
- The used car loan tenure is up to a maximum of 5 years.
These conditions vary from financier to financier. Some banks give used car loans for vehicles having age maximum of 6 years. This may vary depending on the band of the car too.
Loan against Car
This type of finance is not advertised a lot and it is not available with all the lenders. This finance option is available with selected banks and NBFCs like HDFC Bank, Axis Bank, ICICI bank, and others. Some of the banks provide top-up loans for the existing customers.
Benefits of a loan against car:
- The loan is available for up to 80% of the original loan value of the car.
- The interest rates are very low compared to the personal loans.
- The age of the car should not be older than 5-6 years.
The conditions may vary as per the banks and the other lenders. Some provide loan amount for up to 100% of the original value of the vehicle. Apply online for a car loan and compare the offers across banks. Get the best deal for your loan and ride your dream car.