The car loan has dramatically improved your car loan ability. All you need to do is pay a small portion of the car price as a down payment, and some of the costs can be paid in the form of EMI at a lower price. Even a mortgage loan can go up to 7 years.
If you are planning to get a car loan, consider the following before applying for a loan:
Download your credit report before applying for a car loan
Before approving your car loan application, lenders issue a credit report to assess your creditworthiness. Many lenders also offer pre-approved car loans for your credit score. Generally, those with a credit score of 750 and above have a higher chance of getting a loan. Therefore, be sure to download your credit report from the online financial market or credit bureau for at least six months before applying for a car loan.
Compare your loan rates with all lenders
The IDFC First Bank Car Loan usually starts from 8.65% per year depending on the lender, the car model, repayment rate, job profile, credit, etc. Some lenders also offer a special interest rate to existing customers. Therefore, inquire at your existing bank about this car loan offer and visit the online lending market site to compare loan rates with prices shown by other lenders.
Compare loan rate with LTV
The LTV rating for your car loan could be the price of your ‘street’ car sponsored by the lender. All that is left is a margin or lower payment, which must be paid to your fund sources. Since most lenders do not borrow up to 100% of the car purchase price, be sure to compare the LTV rate to all lenders. Try and make higher payments as it leads to lower interest costs. Lower fees can help to get a loan at a lower price and better credit deals.
Check your EMI accessibility
You can check EMI accessibility by deducting your monthly expenses, insurance premiums, SIP contributions, existing EMIs, etc., into your monthly salary. Note that most lenders tend to opt for full EMIs, including your car loan EMI, to be less than 40% of your monthly income. Once you know your EMI transaction, choose a position as short as possible, which will reduce your interest costs.
Features of the processing fee
The loan amount can increase to 2% of the loan amount. Many lenders also reduce or set aside money for car loan repairs during the holidays. However, make sure that those lenders charge high-interest rates or other additional fees to compensate for the Car Loan EMI Calculator.
Look for prepaid or deferred payments
Whether it is partial or full during the loan period, repaying your car loan can reduce your interest costs. Usually, lenders charge prepaid car loans at a fixed rate, which may be up to 5-6% of your outstanding loan principal. Also, some lenders put a cap on the number and number of prepaid payments allowed throughout the reign.
Steps to follow in choosing a car loan
Step 1: Shortlisting of vehicles
Do you already have a car in mind? Or are you just finishing the product and model?
The car loan process starts after the selection of the car model.
Step 2: Check the eligibility
An easy way to check your eligibility is to use an online car eligibility calculator online. To begin with, it is recommended that you choose a car loan six times your annual salary. However, the eligibility process may vary depending on the city, income, occupation, etc.
Step 3: Find the loan amount, tenure, and EMI
How much money do you need? For how long? Calculate the amount of EMI.
Step 4: Apply and provide documentation
You can now apply for an online loan or visit your nearest branch to complete the formalities. From income proof to address proof, keep all your documents ready.
Step 5: Book your car
Once the loan is approved, you can visit the dealer and pay the recommended car price. The bank will deposit the loans directly into your account.
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