5 reasons to compare Car Loans?
Cars are a great luxury for you and it serves the right purpose for daily needs. Buying a car is not as difficult as it was in the past. You can get a car loan with ease in today’s times and get a car at your doorstep without much efforts. There is a strong competition in the market for car loans or any other loan products. Banks and financial institutions keep on calling you every now and then to apply for a car loan so that you can travel with ease. But all this has made the competition so healthy that you can benefit from it to the core. However, there are a few things that you should consider before you apply for a car loan. These things should be helpful for you to compare car loans so that you are not cheated or pay more in such a transaction. Let us look at it in detail.
Things to Consider in a Car Loan
- Loan Value for Car Loan
Car loan value is an important part to compare with other banks and financial institutions so that you get the best value. Your loan value can change with the parameters that car loans have such as interest rate, tenure, processing fees and much more. All this must be checked in detail so that you do not get the shock of your life when you repay more than what you signed up for.
- Down Payment
Down payment is always a difficult task to manage. You have already finalized the car of your dreams and would like to get behind the wheel to take it out for a spin, but the down payment is the culprit here. You would have to identify how would you pay the difference between the loan value and the cost of the car to get the deal rolling. Most banks ask you to pay 5% to 15% of the car cost as down payment. But some banks and financial institutions help you with complete 100% funding for your car loan. These banks have a good relationship with the client so that such things can work out. However, you should check the details as such deals may charge you extra interest rate which would make your car costly.
- Processing Fees
You should look for the processing fees charged on your car loan. You would not want to pay more processing fees or for that matter any processing fees. Many banks have an offer or scheme going on which would help you to waive off the processing fees or reduce it to a negligible amount. Ensure that you compare all bank car loans so that you do not miss out on an opportunity. Also, banks ask minimum documentation so that your car loan application can be processed as fast as possible.
- Pre-Closure Charges
There is a tenure for every car loan and you need to make a payment for it so that the bank can get a full payment for the money they lent you for the car. But what if you wish to pre-close your car loan? Well, there are options available from banks which would help you to close your loan faster so that you need not pay much interest for the car and make it cheaper. They charge a percentage over your outstanding amount so that you can close your loan beforehand. However, some banks don’t even charge that so that your loan can be closed soon. Make sure to know and compare all such details before you apply for a car loan.
- Know the EMI
It is important to know the EMI you would be charged on your loan value. This can be checked using the car loan EMI calculator available on the official websites of the banks and financial institutions. These calculators need inputs such as loan value, rate of interest and tenure of the loan. The EMI would then be generated and would not change even when you apply for a car loan unless the input value changes. These calculators are that great in usage and can be used by anyone.
So, ensure to compare all such points and many more if it worries you so that car loans can be availed with ease.