Car loans officially started in 1919. A car loan is also called an automobile loan. A car loan is an amount a customer borrows to purchase a car. Loan indicates money which lends or borrowed by an individual, a business, or other activities. The one who lends the money is known as a lender, while the one who borrows money is known as a borrower. When loan money is taken out a borrower has to pay the whole amount along with the interest at a certain date.
The car loan procedure is as same as other loans procedure. Many times, a car borrower considers a car loan and applies for it, in another hand customer may use a personal loan too for the same purpose. Car loan has a time limit of 24 or 60 months and some are for a long time too. All this type of loan comes under financing.
You can apply for your car loan at your local banks. The one who lends money also checks the borrower’s credit. Credit is a detailed history of borrower credit, and if the history credit has a bad evaluation it may be considered ineligible for a car loan.
Payment processing consists of two parts –
- The Principal
- The Interest
Car loan depends on three criteria –
- Borrower credit rating
- Car is new or not
- Cost price of the car
As of now, purchasing a car with a lending loan is increasing day by day. Now it allows many advantages to search it online, as consumers allow comparing interest rates as well as rates from a wide range.
Types of documents needed for a car loan:
- Any I’d proof
- Passport-size photos
- Residential proof
- Driving license
- Last three months’ salary slips and many more.
Different banks provide different interest:
State Bank of India provides 7.70%p. a low interest. ICICI provides 7.00 % p.a low interest. HDFC Bank provides 7.50%p. a low rate. Central Bank of India provides Repo rates+ 4.80% low rates.
Car loans are defined as the amount of money a borrower has to pay from his pocket. Hence, there will be more financing loan schemes in the market, with valuable conditions.
It’s a good option for consumers to use the down payment option for payment as they have to borrow less and pay less interest to the bank and it leads to less car total cost.
The age limit of a vehicle makes importance in the matter of deciding car interest rates. It also decides the accepting or rejecting a loan application.
