People often used to dream of buying their car in India earlier. But the finance option not only made this dream easy but also convenient. Today all the major private and public sector banks in India provide car loans at very easily low-interest rates. However, with so many options available in the market, the borrower gets confused. Keeping this in mind, we are going to tell you some such things, due to which you can be able to get the right car loan.
1. Get Your Credit Report Before Applying for a Car Loan
The interest rates on the loan are decided by parameters like a source of income and credit score. If you have a high income but a poor credit score, your loan rate may still be higher. For this, you need to always keep your credit score accurate. Because people with a credit score of 750 and above generally have a higher chance of getting a loan.
There are many options available for a car loan at present. Therefore, you can take online help from your preferred lenders to compare your options. A car loan can be as long as 7 years in most cases, and the borrower has to pay higher interest on it. So what you will pay during the entire loan tenure also matters. Get an in-depth assessment of your interest rate and loan tenure.
3. View Prepayment or Foreclosure Charges
Lenders generally charge a fee for prepayment of car loans offered at a fixed rate of interest. Which ranges up to 5-6% of the outstanding loan. At the same time, some finance companies and banks also limit the amount and number of prepayments during the loan tenure. So, if you are opting for a fixed rate car loan, do consider the prepayment or foreclosure charges.