In an attempt to attract more customers, lending institutions are coming up with new loan products and car loan repayment options every now and then. Different kinds of customized car loan products are available in the market, specially meant to suit the variety of needs of the borrower.
Various products of Car Finance provided by the banks and NBFCs. Most of the consumers are not well aware of the methods available for the loan repayment.
Here are some of the Car Loan Repayment Options:
- Regular EMI:
It is the most common type of car loan repayment option that the borrowers choose. 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. Under 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.
- Step Up EMIs:
In this method of repayment, the amount of EMI increases during the loan term as the repayment progress from lowest in the first year, gradually increasing to highest in the last year.
- Step Down EMI:
Unlike the Step Up EMI option, the EMI reduces gradually from being highest in the first year to lowest in the final year of the loan tenure. It reduces the burden for the next coming years.
- Balloon EMI:
Under this method, there is a provision of paying the lump sum amount about 20 % of the principal amount at the end of the repayment tenure period. The interest rate in this method is higher than the regular EMI method, as it reduces the initial burden on the borrower.
- Special Tie-Ups:
It is referred to as the super saver tie-up method. This scheme ensures the maximum benefits to the customer, as the financier has the tie-up with the bank that a borrower uses. Under this arrangement, 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 personalized assistance.