What to look for in your Car Loan Agreement?
A Car Loan helps in purchasing your dream car by providing funds, that are necessary to buy a vehicle. It is the best option for the “squeezed-middle” people. Cherish the moments of your life with an affordale Car Loan.
The points, that you must look in a Car Loan Agreement, are:
• Effective Date: It is the date on which the first disbursement of the loan is made. It is the implication that all the interest computation begins from this date. In case the money is not used within the 60 days from this date, then the loan will be cancelled. Also, the customer should get registered within 15 days of the delivery of the vehicle.
• Amortization Schedule: It is a repayment schedule that the applicant has to follow which contains the principal amount and the interest rates. The applicant has no right to make any changes in this schedule. This can only be done at the time of signing the loan agreement.
• Default: Usually, the people are aware of the reasons of a default in the payment of the auto loan, but very few people see that, in most of the car loan deals, the lender states that it will give no notice, warning or intimation to the borrower, regarding his obligation to assure the payment of the loan dues in time. The borrower also needs to pay penalty charges in case of any default.
• Prepayment: Many banks and finance companies have a declared prepayment policy. The loan agreement only shows the acceleration in the repayment. A written document on this regard can be obtained during the signing of the document.
• Set Off: The lenders have the freedom to set off any money, insurance claims or securities that are deposited with them in order to recover any outstanding amount of the loan that the applicant is incapable to pay without any prior notification to the borrower.
• Inspection & Assignment: The lender shall have the right to examine the car and its related documents at any point of time during tenure of loan without any prior notification to the applicant.
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