Everything You Should Know Before Applying For a Car Loan

Buying a car is an important milestone in any person's life after owning a house. Because it requires a significant amount of money, you can solve this funding issue by taking a car loan. In the prevailing time, taking a car loan is easier and more convenient than before. You can even get a car loan through an online application.

But before you apply for a loan to buy your dream car, it will prove beneficiary for you to consider the following points.

A few things You Should Consider Before Applying For a Car Loan:

1)  Interest Rate

One of the most essential things you should consider before applying for a car loan is an interest rate. The interest rate significantly impacts your EMI, loan tenure, and ability to pay back the loan.

So, always compare the interest rates offered by various car loan providers in ahmedabad. There is no standard rate of interest for a car loan. Thus, you can benefit from the difference between the different interest rates.

Hence, before going for a car loan, never forget to study quotations of interest rates of various car loan providers. It will help you make a wise decision.

2)  Loan Amount, EMIs, and Loan Repayment Tenure

Nowadays, car loan providers offer a loan of up to 100% of the car's on-road price. You can choose the right amount of loan according to the price of the car and the money you require to purchase a car.

But you should never forget that the hefty loan amount means a high-interest rate with big EMIs. In contrast, a smaller loan amount means a lower interest rate with smaller EMIs.

Your loan amount and EMIs will significantly impact your repayment tenure. An extended repayment period means small EMIs with high interest and more financial burden. At the same time, a shorter repayment period means hefty EMIs with comparatively lower interest and less financial burden.

So, always consider these points before deciding to go for a car loan.

3)  Never Forget to Calculate Processing Fees, Service Tax, and         Pre-Closure Penalties

After calculating and assessing EMIs and repayment tenure for a car loan, you should see through the things like processing fees, service tax, and pre-closure penalties.

Processing fees: Processing fees vary from lender to lender. So, always compare the processing fees charged by the various loan providers to take the benefit of rate differentiation.

Service Tax: You can pay the service tax in two different ways. First, you can pay in the lump-sum amount at once. And second, you can pay the tax on a yearly basis.

Pre-Closure Penalties: The lender will charge pre-closure penalties. When you cleared the payment of your loan amount before your pre-decided loan tenure. The rate of the pre-closure penalty differs from lender to lender.

It is advantageous for you to choose your loan provider only after carefully studying the points mentioned above.

4)  CIBIL Score

CIBIL score represents your credit history. And your credit history refers to your past transaction with your moneylender. Hence, your CIBIL score reflects your creditworthiness.

There is no pre-decided standard of CIBIL score to obtain a car loan. But CIBIL score of more than 750 is an ideal score according to the various moneylenders.

So, if your credit score is not up to par, you should immediately start working on it.

5)  Proper Documentation

You have to prepare proper documentation before you apply for a car loan. Every loan provider requires a few documents for granting loans. And this requirement of documents won't change even if you decide to apply online for a car loan.

The documents you need for a car loan are here under.

Your address proof, ID proof, income proof, bank statement, etc.

It will be better if you prepare these documents before applying for a car loan.

It will save your time in the future and make your loan procedure quick and smooth.

Conclusion

Obtaining a car loan is more accessible than a home loan or a personal loan, and the procedure to get a car loan has become easier with online loan services. And with the help of the points mentioned earlier, you can choose the best car loan provider in ahmedabad.

Get the best offers on a car loan in ahmedabad at AGIL Finance. We offer top-notch financial services. AGIl Finance is known for its easy loan procedures with minimum documentation and fast disbursal. Obtain a project finance loan and working capital loan in India from AGIL Finance

If you have any questions or want more details regarding a car loan or other loan services, please contact us at info1@agil.co.in and get easy access to funds.