Have you thought about getting a car? Or the process of getting you your car? Getting a car loan is not as hard as it seems to you. It is not hard – but it is confusing. That is why you need some tips and tricks to get you started on the process. Here you will get everything you want to start your process of getting a car loan and getting that car.
How to Get a Car Loan?
Did you know that getting a car loan approved is one of the most sought-after financial products? Here is the process you can follow to get this through.
The application procedure
Now – the very first thing you will need to do is get yourself done with the application process. Now, remember, it is not just checking with an SBI car loan EMI calculator, or so – it is much more than that. Here it goes.
- a) The form:- The very first thing you need to do is the applicants need to fill out the application form of the bank you like and with all of the important things such as the personal details and other needed credentials.
- b) Documents check:- After submitting the application, the borrowers are needed to upload all of the documents asked by the bank. Since the car is guaranteed in the case of a car loan, the documents need to be given.
- c) The approval of the loan:- If the banks get to know that the documents are valid and they find the borrower to be capable of paying the monthly EMI without fail – they will approve the loan within a short span, even within two days.
- d) Disbursal of the Loan:- The loan surplus will be disbursed to you after a period of time, which means the bank will give a certain percent of the amount that you have invested in buying your car.
There are quite a lot of factors that matter before you can apply for a car loan, and you might want to know them before you move forward.
Things you Need to Consider Before your Car Loan
Your CIBIL score has a major role when it comes to car loan approval. The CIBIL score is the rating that is given to an individual customer by the Bureau of CIBIL based on the past loan repayments history. If you are found to be consistent in paying the loan EMIs right on time, then you will be given a high rating. Contradicting that – if you were not regular with the EMI payments – then you will have a lower credit score. This indicates a lower chance of your loan being approved.
The Age of the Car
The age of the car that you plan on buying is very important, and the lender, which is the bank, will consider it while offering you a car loan in India. The age of the car is crucial, and it determines the value of the car. Typically, in India – the value of the car will start depreciating the moment it is taken out of the showroom, at least by the rate of 10%. After this, every passing year, the value will keep decreasing. The banks will give used cars loans for pre-owned cars that are not more than three years old. In this way – they will be able to ensure that in the case of loan defaults, they will be able to take back the invested money by repossessing the value without ending in a loss.
Repayment of the Car Loan
Typically, in India – the car loan has a period of 1 to 7 years. It is up to your comfort what repayment you want to pick. The repayment period has a significant role to play in deciding the EMI. If the period is higher – then your EMI will be below, and if the period is shorter, then the EMI is naturally higher. It is preferred that the buyer could fix a shorter repayment period as there will be higher interest rates.
There are car loans that serve different purposes
– The Loan for a New Car
– The Loan you can take up for a used car
– The loan you can apply against a car you already own
But, before you go ahead and start applying for the loan, do you want to know some more important factors that would come in useful for you? Yes! The tips and tricks for better applications and loans.
Tips Before Applying for a Car Loan
1. Do things in reverse (get loan approval before walking into the dealer showroom)
Get a preapproved loan for your car. When you go to the dealer first, you will end up thinking about how much of the car you can afford. When you have a preapproved loan, you can shop for the lowest interest rates and processing fees.
2. Keep it sound and simple
When you are purchasing a car from the dealership, make sure you concentrate on one thing at a time. It is like when you are playing poker – you keep that poker face so the others don’t find out – because the salespeople can have you thinking about a lot of things.
3. Try not to buy any add-ons
If you have already bought a car – you should know how it works. But here it is for the first timers – you will be led on to buy all sorts of add-ons. But you know what the first part is – you will never even know what these add-ons are worth.
4. Long or short term?
Try to stay on the lower side of the tenure. We know it is easier if you take the longer route since the EMI is low – but you know what is high then? It is the interest rates. This means you will be paying much more interest.
5. A used car is always a good choice
You might think that a new car is good to go, but that is not true. A new car will start depreciating the moment you drive it out of the showroom. Moreover – you will have to pay much less money.
Now you have everything right in front of you – how to get a car loan, some tips you could use, and the different types of car loans you get opt for. This is an awesome day to get started on this process.