How Do Car Loans Work In India?

How Do Car Loans Work In India?

Before making a final purchase call, finalise the car model, the amount of down payment and the EMIs and then the car loan interest rates come into scene.

On analysing how does car loan interest works in India, experts have streamlined buyers according to income levels for taking up auto loans.

How do car loans work?

When you take on a car loan to buy a car, your lender purchases the car for you and allows you to pay it back over a period of years. Most car loans use simple interest, a type of interest of which the interest charge is calculated only on the principal (i.e. the amount owed on the loan).

Can I get a car loan from my bank?

First is convenience. You can apply for a loan before you go shopping so you will have a pre-approval in hand. Your bank or credit union may also be able to negotiate a lower interest rate for you, which will translate to lower payments or a shorter loan term, so you ultimately will pay less for the car.

What should I know before getting a car loan?

5 Things To Know About Car Loans Before Applying

  • Know The Right Credit Score. Your credit score is the single most important factor in determining what type of loan you will be able to get from a lender.
  • Apply For Loans During A 14-day Time Span.
  • Get Pre-approved – Then Shop.
  • Calculate Costs Before Saying Yes.
  • Understand Dealership Financing.

Is taking car loan good?

So, taking a small car is a good idea rather than going in for higher Car loan EMI of Rs. 8000-10,000 in the same income.

1. Rate of Interest.

HDFC Bank11.50% -13.75%Depending on vehicle segment
ICICI Bank10.75% – 15.00%For new car loans
Axis Bank11.50%

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Photo in the article by “Wikipedia”