Buying a car is much easier now. There are different financial company for your help with various and easy re-payable loan. Previously, the procedure was very complicated and time consuming but now it's much easier with a brisk approval.
How are you going to finance your car, is it through your dealer or a car loan from a local bank or credit union? Before venturing into the car deal, it is always better to be well informed about your loan procedures and their schemes.
Research
You should have proper knowledge of loan formalities and their interest rates. Different lender will have different attractive deal to offer you. Do not immediately acknowledge to the interest they offer. Ensure that you are getting a fair interest rate. Speak for your self, there is nothing wrong in negotiating with the dealer about your loan, the sales person will like to have a long relation with you, and therefore he will work harder to get the better prize for you.
Be alert
You should always be on guard when the terms and conditions are being explained to you. Some will offer you a long term loans with low EMI, before agreeing watch out for the car value depreciation and the warranty. Some times you may end up paying more than the actual value. Some times the dealers will come with a choice like zero percent interest or rebate. Do not admit blindly, rather listen to both the scenarios and decide accordingly.
Whether you are dealing with a dealer or with the bank for the loan, there are certain norms that have to be followed in terms of approval.
Normal eligible criteria
&bullMinimum age of the applicant should be 21 years (salaried) and below 60 years at the time of maturity of loan. The gross amount salary should be above 1 lakh p.a. He/she should have minimum of one year of work experience as a permanent employee and for private companies, the employees should have two years of experience.
&bullFor the self employed age limit is again 21years but below 65 years at the time of loan maturity and the annual gross income should be above Rs.60,000 and a partnership firm should have a minimum PAT (profit after tax) income of Rs. 60,000.
&bullFor New car, the bank finances up to 90% of the ex-showroom cost of the car depending upon its model. Minimum amount loan is Rs 1 lakh. The tenure is one to seven years. And for used cars, bank finances up to 85% of the valuation of the car and the minimum of Rs 75000. The tenure here is one to five years.
Documents required for car loans: All banks and financial firms differ with their interest rates and plans. You have to submit all the essential and genuine documents for the quick approval. (Documents may vary from banks/financial firms with whom you apply).
