Car Loan Repayment Option
Car loans in India have become more popular in the past few years with banks creating more innovative loan products each year in an attempt to catch more and more customers. There are many kinds of car loans available in the market, meant to suit the different needs of the borrower.
In addition to the different types of car loans one can avail today, also available are many options to repay a loan. Most of us are not aware of a variety of ways in which one can get up a car loan.
Car loans are becoming the common way to purchase a car owing to the need and flexibility that comes with it. First of all, you don’t have to talk with dealers for loans or empty your life savings to buy a four-wheeled dream.
Here are some of their car Loan Repayment Options:
The most common repayment method, Under this option, a fixed rate of Car Loan Interest Rate is decided to accord, the person has to pay calculated EMI (Equated monthly Installments) in the specified tenure. in this option, the interest rates are the lowest and the EMI can be paid at the end of the month or the beginning of the month depending on the party
Step Up EMIs:
In this method of repayment, the amount of EMI increases during the loan term as the repayment progress from the lowest in the first year, gradually increasing to the highest in the last year.
Step Down EMI:
In step-up EMI, the initial EMI is charged less and it increases based on the assets that the expected income of the borrower also increases. Generally, the EMI change would happen twice during the entire loan tenure. It reduces the burden for the upcoming years.
In this method, borrowers are allowed to make lump sum payments towards the end of repayment time. The interest rate in this method is higher than the regular EMI method, The balloon method reduces the total burden of a loan on the borrower, but as he has to pay more interest.
Sometimes the dealer and the bank have a tie-up in a way that whenever there are excess funds, the same is used for the prepayment of the car loan. This helps the borrower to reduce the principal as well as to reduce the total interest. It is referred to as the super saver tie-up method. Under this method, there is always an additional amount of money present in the account; the same can be used for making repayment of the car loan.
Each consumer has a different set of financial considerations that are based on which the consumer can find the most suitable option for his car finance. A person must have a thorough knowledge of various opportunities available in the market.
Save your time and apply for car loans online through DialaBank and get personal help