A car loan is a type of secured loan, as here the lender will consider your four-wheeler as collateral. If you are not able to repay the loan amount the lender will consider you like a loan defaulter and will seize your four-wheeler to pay the further remaining installments.
Pros and cons of an auto loan
Below are mentioned some of the pros and cons of the vehicle loan:
Pros:-
You can achieve an auto loan at a very lower interest rate.
These loans are easier to obtain with good credit history.
Consider a convenient way to finance a four-wheeler for yourself.
Cons:-
You are not given the complete authority of the car until you do the final repayment of the debt.
Sometimes, people are not capable of depositing the down payment to achieve such a loan.
5 mandatory things to know about an auto loan
Whenever you are applying for an auto loan, try to consider the mentioned things as it will help you to achieve a decent auto loan:
Opt for the best interest rate in the market: Whenever you want to opt for an auto loan try to search for the lender that is providing loans with a minimum interest rate. Don’t go with the option of taking a loan from a car dealer, as they will provide you a loan with a higher interest rate.
Prior verification of documents:- When you apply for an auto loan, before it, try to verify that all the documents that are required to get the loan sanctioned are available or not. Make two sets of both the KYC and the financial documents. Sometimes, with complete documentation, there are chances of availing some extra benefits from the lender.
Have a subtle approach while choosing the loan tenure:- Generally, the vehicle loan tenure lasts for up to 7 years to do the loan repayment. But if you opt for a loan for such a long period, then there is a chance that you will end up paying a higher interest rate. Therefore, be precise in choosing the right tenure for yourself.
Calculate monthly installments and other charges:- Try to calculate various charges including the EMIs, processing fees, service tax, and foreclosure penalties to remove any future tension related to the payment structure. You can also go through your monthly EMI by using a car loan EMI calculator.
Ask for extra offers from the lender:- Ask the lender with whom you are opting for a loan that is there any special offer on the loan you are opting for.
Lakshmi Vilas Bank Car Loan is a good loan to consider as it provides more flexibility in loan repayment tenure. Opt for the loan that suits you the best.
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