Things to consider before you choose Car Loans

You can read different automobile journal and check online to find the best car for your family, and you can contact the respective dealer of that brand to buy the car. But the dealer will recommend you apply for a car loan and you will not be able to choose the best car loan without some prior knowledge. So here you can find some essential information about car loans and you must compare different types of car loans before you apply for the same.

Car Loan

#5 things to consider before you apply for a Car Loan

1. Loan value: This is the most important factor for choosing the best car loans. Basically, interest rate and processing fees are the basic factors of the loan value and you must compare such charges before you apply for a loan. If you find it complicated, then just calculate the EMI for your car and compare the EMI of different lenders. This is the smartest way to choose the best car loans.
2. Down payment: Most of the banks or lenders expect you to pay an upfront charge as a down payment for your car. Normally, you need to pay 5% to 15% of your total car value as down payment and the rest of the amount will be paid by the lenders. But some lenders can offer you a 100% finance option and you do not need to pay any initial amount as a down payment. (But most of the lenders or banks do not pay the registration and legal fees for your car and you must pay these charges.)
3. Processing charges: Most of the banks follow the traditional way to disburse their loan and they will take maximum time to approve your car loans. In this case, you can apply for a car loan to private lenders because they can provide you with the loan within 24 hours. You need to check the documentation required by the lenders and then apply for the same with all necessary documents. You can even apply for the car loans at the bank’s kiosk and you can find such kiosks at the dealer’s place. Apart from that, you can also check your net-banking options to avail instant car loans. Banks can approve your car loan within a few seconds if you have such offers on your net-banking dashboard.
4. Prepayment Charges: You can make some part payment to reduce your interest rate or you can foreclose your car loan before the deadline or tenure. But in this case, banks can charge you some extra amount and you need to pay 2-3% extra on your outstanding dues as pre-closing fees. It is better to discuss the pre-closing and foreclosing charges with the bank or the lenders before you avail car loans.
5. Insurance: Today, due to the competitive market, most of the banks and financial lenders provide free insurance coverage to their customers. They can provide you with some additional facilities such as personal accident coverage and liability insurance free of cost with their car loans. You can check such freebies before you apply for the loan.

 How would you choose the best Car Loan?

It is suggested to stay away from the dealer’s loan because automobile dealers can offer you an instant car loan with some free car accessories but they will charge you a huge rate of interest. People may avail such loans to save their time because they do not need to visit the bank branches. But the higher rate of interest will drag more amount from you at the end of the deal and you can easily save this amount by consulting with your banker over the phone.

Car Loan

You can easily contact the phone banking services of your bank and avail a car loan at an attractive rate of interest.