Car loan or auto loan is one of the easiest and best ways of owning a car. In India, car loan industry is on constant rise for the last decade or so and is expected to rise furthermore in the near future. It is also one of the most sought after loans in India. Due to extremely large number of borrowers in India and an equally large number of lenders, the car loan industry is nothing short of a fish market. In this cut throat competitive market you must be street smart before opting for a car loan so that you get yourself the best car loan.
The loan amount and the interest rate on auto loans depend on your monthly income, credit score, type of car and the down payment, which may vary from 9% to 13%. The tenure for car loans in India may vary from 2 to 10 years. So if you are thinking of buying a car in the near future, here are some of the points you should consider in order to get yourself the best car loan:
• Don’t go for any pre-approved loan offered by car dealers. You should shop for loans in different financial institutions to give yourself the best possible option.
• You should limit your loan shopping for a period of two weeks. Applying to loan brings down your credit score. One of the rarest known fact but the loan enquiry made over a period of two weeks is considered as one. So your credit score is affected only once if you stick to this.
• You should also time your car loan to perfection. Try to visit banks at the start and closing of the month, as banks have monthly targets there is a high chance of you getting a better deal at the end of the month.
• Always consider a high down payment as it not only brings down the loan amount but also the interest rate and the total interest to be paid during the loan tenure.
• Choosing a car model can also affect your interest rate and the loan amount. The interest rate for less popular and outdated car model is higher as compared to those in the popular or premium category.
• You should know your credit score before applying for any loan as it not only makes you realize your financial status but also makes you aware of the interest rate that you are eligible for according to your credit score.
Shopping for loan and car separately is always an added advantage. All of this combined with a little hard work and a bit of patience is definitely going to help you in getting the best car loan.
The loan amount and the interest rate on auto loans depend on your monthly income, credit score, type of car and the down payment, which may vary from 9% to 13%. The tenure for car loans in India may vary from 2 to 10 years. So if you are thinking of buying a car in the near future, here are some of the points you should consider in order to get yourself the best car loan:
• Don’t go for any pre-approved loan offered by car dealers. You should shop for loans in different financial institutions to give yourself the best possible option.
• You should limit your loan shopping for a period of two weeks. Applying to loan brings down your credit score. One of the rarest known fact but the loan enquiry made over a period of two weeks is considered as one. So your credit score is affected only once if you stick to this.
• You should also time your car loan to perfection. Try to visit banks at the start and closing of the month, as banks have monthly targets there is a high chance of you getting a better deal at the end of the month.
• Always consider a high down payment as it not only brings down the loan amount but also the interest rate and the total interest to be paid during the loan tenure.
• Choosing a car model can also affect your interest rate and the loan amount. The interest rate for less popular and outdated car model is higher as compared to those in the popular or premium category.
• You should know your credit score before applying for any loan as it not only makes you realize your financial status but also makes you aware of the interest rate that you are eligible for according to your credit score.
Shopping for loan and car separately is always an added advantage. All of this combined with a little hard work and a bit of patience is definitely going to help you in getting the best car loan.
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