Banks and NBFCs offer different financing schemes in the form of finance for purchasing cars. The interest rates on the car loans vary depending on the bank as well as the loan repayment method. The lender finances a certain percentage of the price of the car quoted as a percentage of the ex-showroom price, and the rest amount is paid as down-payment.
The important aspects included in an application for a car loan are:
- Loan Amount: The money lent by the lending institution depends upon the price of the car, model, employment, and stability of income of the borrower.
- Tenure and Interest Rates: The Car Loan is offered for a tenure of 3-7 years. The interest rates charged can be fixed and floating, depending on the term of the loan and various other factors.
- Documents: Proof of income such as ITR(Income Tax Returns) and salary slips, ID proof, and Proof of Address
- Processing Fee: The processing charges, stamp duty, and documentation charges are applicable, depending on the bank’s norms as per the loan amount.
Points to Note:
• The Car Loan Interest Rates offered on a new car are generally different from those for used cars.
• The Car Loan gets disbursed within 1-2 days of submitting the necessary documents.