HOW TO PLAN FOR AUTO LOAN ?


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In previous 3 years 15 lac cars has been sold. This is a record. It is a guess that in next 3 year this will reach up to 3 lac. The credit of increasing in sell of so many cars also goes to auto loan. About 80% cars are purchased on loan. In such circumstances it is essential for customers to know widely and precisely about loan offers.

BARGAIN

At first, showroom dealers try to make us understand that he has the best loan offer. But don’t be trapped by them. One should check the rates of different banks and dealers provided on car loan. Actually some dealer and financer promote only one bank, and for this they take 1-2% commission from the bank. It will be better that you consult the bank direct.

If we make deal with dealer, then we should ask about discount, car stereo and free accessories etc. Sometimes banks offer pre approved loans, but also in this case don’t forget to compare with other banks. It can be profitable to bargain for pre approved loans. In this case the first profit is that processing of loan is quickly performed and the second is that we have not to pay any fee. Sometimes Banks provide discount up to 50 basis points to their pre existing customers.

TAKE THE HELP OF INTERNET

Internet is the best option for research for car loans. We can know specifications of models, features and the cost of cars in different websites. We can confirm interest rate of Banks and finance options by websites of banks. Some useful websites: –



www.autocarindia.com



www.cardekho.com



www.indiacar.com



www.gaadi.com



www.autoindia.com



www.carsalesindia.com



Verify the cost of metallic and non metallic, because there should be difference of 3 to 5 thousands between them. Beside it interest rate of different cars may be different.

FLOATING OR FIXED

We should put in our mind that whether we should choose loan on floating rate or fixed rate. Generally, floating rate looked attractive, and 50 basic points below than fixed rate, but there is no risk of increase in rate of interest in future. In previous some years the rate of interest on car loan lies between 9.25% and 10.25%. In this situation fixed option is better. It will be better that finance your car in the last of month, because in this time there is a pressure on finance companies to achieve their target. In this situation we can bargain easily.

HOW MUCH WE SHOULD PAY DURING DOWN PAYMENT?

Customers always want that they should give down payment at least. Generally financer says to pay 15% as down payment. But, we should pay maximum as down payment, so that we may avoid the burden of EMI.

EX SHOWROOM PRICE

Financer gives loan on ex showroom price in that ex showroom price and discount is included. On road price is the different thing in which insurance and road tax is included.

NO HIDDEN COST

It is not enough that we make deal with financer, but it is also essential to know that how much processing fee is being paid by you as processing fee. If we pay the amount before time then how much is the pre payment fee of the bank. If you bargain on the processing fee you may get heavy profit.

NAME OF BANK

RATE OF INTEREST

HDFC Bank

9.75

Bank of India

9.75

State Bank of India

8

Axis Bank

10 – 10.5

IDBI Bank

8.5 – 10

ICICI Bank

9 – 13

Punjab National Bank

10 – 11

Reliance consumer Finance

9 – 9.75





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