Key Features Of A Car Loan.

Are you looking to purchase a new car? In the market for a new car? How can a car loan help you? Well, first and foremost a car loan is a secured loan, in other words, the banks or lending institutions with which you choose to apply for a vehicle loan will keep your car as collateral. This implies, if in case, any situation arises where you are unable to pay back your loan or unable to make the EMI, then the banks may take the car as payment for the loan. Nevertheless, if you have defaulted on only 1 or 2 EMI’s you can personally speak to the bank inform them of your situation, and ask them for a leeway.

There are plenty of banks and financial institutions providing this loan. One of them is HDFC car loan interest rate, provided by HDFC bank, which is comparatively flexible than other banks.

HDFC bank requires the following documents to approve the loan:

As a valid proof of identity, the bank will accept your Voter’s Id or passport. If you are a salaried employee they also require your latest salary slip and Form 16 as income proof. For the self-employed individual, they require the Income Tax Report for the last 2 years.

Features-

Variable rate of interest - In this facility, the rate of interest on the applied loan will change throughout the entire period.

Fixed-rate of interest - This as the term implies means that the interest rate on the loan will remain unchanged and constant.

Car loans can be applied online as they are simple and the documentation procedure is not time-consuming. As soon as the entire application and approval procedure is completed the loan amount is transferred to the borrower’s bank account.

The term for the automobile loan ranges from 24 -72 months, if the auto loan you have applied for is for a shorter period the car loan interest rate will be low, however, the monthly payments will be on the higher side. The factors which affect your car loan rate are your CIBIL credit score, the loan term you have applied for as well as if you live in a metro or not.

Conclusion- All in all, if you are looking to buy a car and don’t have the necessary funds, some banks will finance up to 100% of the on-road price of the car, so, if you are one with an average income, you can still go ahead and apply for the loan. Nevertheless, do see to it that your credit score should be 700 or above and there should be no defaults on your previous loan or credit cards if any.   

Also read:- About Car Loan