A car loan is a loan available for buying a new car. It can be available individually or jointly with clause relatives. Car loans are secured loans and the car itself is used as a collateral. You can apply for a car loan through different branches if you want to purchase a car you should research the car model to purchase. You should choose the best way to finance the car. Do not borrow money from relatives. The bank loan will be their own liability and they can repay the money over a period of time. There are many banks in India that provide car loans at very good interest rates.
People should research the various car loan schemes offered by different banks. While comparing different car loan schemes you should focus on interest rates. The CIBIL score also has an impact on the interest rate. Banks prefer to charge lower interest rates from people who have a high CIBIL score. If you want to apply for a car loan to understand the car loan interest rate.
There are mainly six factors that can make a big difference to the car loan rates. They are income, credit score, length of term, down payment ,preapproval and the dealers profit. If you want to buy a car and work on improving your credit score you may be able to get an even better deal. The main documents required for a car loan are income proof, bank statement, age proof, sign verification proof ,employment proof and additional documents like pan card.
Having a good credit score is essential to get approved for a car loan. A good credit score ranges from 670 to 750. you will get car loans at low interest rates. It starts from 6.7%. If you have a credit score above 750,you will get a car loan easily. Bank provides 80 to 90 % loan for the price of the vehicle. Some banks provide 100% of the price of a vehicle.
Dealers and banks have a tie up. You will get loans at low interest rates through them. Maximum car loan has a 7 years repayment period. It has processing fees. So you should check the processing fees of car loans. Then you can finalize it. We can see the interest rates of different banks and EMI for Rs 10 lakhs for 5 years .
Banks interest rates EMI
SBI 7.20 19,896
Canara bank 7.30 19,943
Indian Bank 6.90 19,754
Axis bank 7.45 20,014
ICICI Bank 7.90 20,229
HDFC bank 7.95 20,252
Federal Bank 8.50 20,517
South Indian Bank 9.05 20,783
Dhanalakshmi bank 8.50 20,517
Credit score is a measure of an individual’s ability to pay back the borrowed money.Your cibil score is a three digit number from 300 to 900 it measures your credit worthiness. Credit score is a numerical expression based on level analysis of persons credit files. Mainly it is based on credit reports typically sourced from credit bureaus. Mainly credit score ranges are exceptional( 800 -850), very good (749- 799)good(739- 670) fair(669-580).
Lower credit score means you are more likely to be credit risk. High credit score means that you are more likely to be a responsible borrower. Each credit score falls within a specific credit score range. The landers can understand how you have used credit in the past. Credit scores are calculated by analysing the information in your credit report and assigning a numerical value. It reflects your credit history. If you have a history of on time payments your credit score is high ,but if you start missing credit card payments your credit score is low.Credit score is a very important element of your financial picture.
Make sure that you pay the minimum balance due on time. Do not close old credit card accounts for too many new ones. You should review your credit report, it helps to improve your credit. Payment history has the biggest impact on your credit score so you should handle bill payments. Charging all of your monthly bill payments to a credit card. Pay your Credit card balance in full each month. Raising your credit limit can help your credit utilisation. You can increase your credit limit online.
You should keep old accounts open. If you have old credit accounts that you are not using do not close it. Credit monitoring service is an easy way to see your credit score changes.