Do you want to have your own car? Dreaming of a four wheeler and roam around with your friends? It is possible with the help of a car loan. A car loan is a secured loan in which the purchased car will be financed and you will be paying the loan EMIs to the bank. Normally, 80% of the amount is financed by the bank whereas you have to pay 20% of the amount as down payment. To apply for a car loan, you need a minimum CIBIL score of 750 for most of the banks. Know more about the features of a car loan below-
Features of A Car Loan
Longer Repayment Period
A car loan has a longer repayment period than a normal personal loan. You can avail a car loan with your desired repayment period. If you need a longer time to repay your car loan, you can have a loan tenure ranging from 7 years to 10 years. It also depends on the lender that how much repayment period it is willing to give to the borrower.
Zero Down Payment possible
In most of the cases, lenders demand at least 10% to 20% of the cost of the vehicle as down payment. However, some lenders do offer 100% financing of the car. It solely depends on the eligibility criteria of the borrower and his credit score.
Larger Loan Amount
Borrowers can get large loan amounts for car loans. The loan amount depends on the value of the vehicle. If you want to have a luxurious car, lenders may offer you a larger loan amount depending on your credit score and other eligibility criteria. Most lenders can provide you with a loan amount of 85% of the on road price of the car.
Instant Approval and Disbursal
Lenders facilitate instant approvals in cases of car loans as these are secured loans. If the borrower fails to pay the EMIs, the lender will simply possess the car. Therefore, it does not require any extra formalities and you can get the loan instantly.
Car loans have affordable interest rates. For example, SBI car loans are offered at interest rates starting from only 7.70%. ICICI bank car loans interest rates are starting from 7% per annum. Plus, if you have an excellent credit score of 750 or more, you may also have the opportunity of negotiating interest rates.
The Bottom Line
Obtaining car loans are easy until you have an excellent credit history. When obtaining any type of debt, you need a CIBIL score of 750. The more credit score you have, the merrier it is. Lenders always hunt for customers who have a higher CIBIL score. Before applying for a car loan, make sure to go for a CIBIL score login and check your credit score. Make a habit of regularly checking your credit report and look for errors. If your credit report has mistakes, it will directly affect your credit score. Therefore, it is smart for the user to carefully analyze your credit score and then apply for a debt.