5 Factors To Consider Before Take A Car Loan

5 Factors To Consider Before Take A Car Loan: A Car Loan comes to your aid when you are short of funds. Read on to know what factors can help you in grabbing a good deal.

This is where a Car Loan comes to your aid. It adds up the deficit amount, enabling you in fulfilling the dream. The payback mode is via EMI�s over a mutually agreed period. 


Here are the "5 Factors To Consider Before Take A Car Loan"

Ensure Loan EMI Stays Within Payable Limit

EMI affordability is another factor that you should certainly check before taking a loan. You should assess and calculate all your expenses before taking a call on how much Car Loan EMI you can afford. It will be wise to ensure that your Car Loan EMI along with any other existing EMIs (home or any other loan) do not cross 40% of your monthly income. You can also choose to close any unwanted loans before applying for a Car Loan to ensure you stay below the threshold limit for easy repayment without facing any financial burden.

Processing Fee Charges

The processing fee is the percentage of your loan amount that banks charge for processing your loan. It varies from bank to bank. Many banks often waive off the processing charges through special offers or discounts. When a bank waives off your processing fees, be cautious and do check that no other charged has been introduced or a higher interest rate has been charged to offset their loss.

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Know The pre-closure Charges

There are some banks which levy pre-closure or pre-payment charges. While selecting a lender for your Car Loan, you should check about the pre-payment charges. It would be wise to read all the documents to avoid falling prey to hidden charges. Clearing your debt before the end of the loan tenure is not a crime, however, you should not be penalized unnecessarily for such a good deed.

Interest Rate

The rate of interest is one of the most important factors to consider as it will decide your monthly EMI outgo.  Since the figure varies from bank to bank, it is wise to do a comparison of interest rate offerings of different banks to bag a good deal. A lower interest rate means lower EMI and lower amount of interest to be paid. You can also get a good deal if you maintain a healthy Credit Score. Negotiating a good deal would not be tough if you have good terms with your bank.

Down Payment

Car Loans nowadays are available for up to 100% of the ex-showroom cost of the vehicle. While this may appear to be a great and attractive option, but it means that you will have to pay higher EMIs to clear the debt. While looking for a Car Loan, try to arrange for a down payment that can keep the EMIs lower. You should also opt for a shorter tenure to reduce your interest cost. This may mean higher EMIs, but do it only when you are not compromising on your other financial and investment goals. It would be wise to go for a loan only after you have saved enough for your Car Loan down payment. For example, if you are looking for a Car Loan worth Rs. 7 Lakhs with an interest rate of 12.5% for a 5-year tenure, the total interest payment will come to Rs. 2,44,913. Now if you down pay Rs. 2 lakhs and seek a loan of Rs. 5 lakhs, the interest component comes down to 1, 74,938 resulting in a saving of Rs. 69,975.

Best Cars For Different Budgets

Best Cars For Different Budgets: Not able to choose the best car within your budget? Here are my top choices in four different budget categories, just for you.

 Here�s a quick breakdown of my favourite cars from four different budget categories:

Budget � 5 Lakhs

Maruti Suzuki Alto

Price: Starts at Rs. 2.67 Lakhs (Ex-showroom Chennai for Alto 800 standard)

C�mon, who doesn�t love the Alto? The Maruti Suzuki Alto is for the budget-conscious lot who don�t want to compromise on style and a peppy performance. The design is commendable. The mileage is great � expect between 25 to 33 km from this mini car. And the best part is that it is affordable too.

Renault Kwid

Price: Starts at 2.78 Lakhs (Ex-showroom Chennai)

Hello, kiddo! This entry-level hatchback is immensely popular in its segment. It�s lightweight; it�s got an SUV-like appearance; it�s got top-class features, and it�s the fastest car in its segment. This little kid has surely found a place in my heart (not yet in my garage though but someday soon, maybe!).

Tata Tiago

Price: Starts at Rs. 3.29 Lakhs (Ex-showroom Chennai)

It�s chic. It�s a value-for-money option. But the question is does it stand up to competition? Well, if it didn�t, then it wouldn�t have made it to my list of favourites. I think that the Tiago has just the right amount of everything � styling, interiors, performance, etc. � needed to fare well in its segment. A quality product from Tata with a decent price tag, ideal for price-conscious Indian buyers.

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Maruti WagonR

Price: Starts at Rs. 4.30 Lakhs (Ex-showroom Chennai)

Another popular Maruti product, the WagonR is a hot favourite among Indian consumers in the small hatchbacks segment. I mean, who wouldn�t fall in love with that tall-boy design and smooth performance, right? I feel that the WagonR is the perfect ride for small families who do not want to spend a bomb on a car. What do you think?

Budget � 10 Lakhs

Maruti Suzuki Dzire 2017

Price: Starts at Rs. 5.38 Lakhs (Ex-showroom Chennai)

It was one of the best selling cars last year. And why wouldn�t it be? New design language, lots of smart features, AGS option, and equipped with safety features even in the standard variants, the Maruti Suzuki Dzire 2017 is surely going to rule its segment. And the affordable price tag makes this sub-4 metre compact sedan a great catch for the price-conscious lot.

Volkswagen Polo

Price: Starts at Rs. 5.42 Lakhs (Ex-showroom Chennai)

The best thing about the VW Polo is that it can take on everything you throw at it � it is one hell of a powerful little hatch. Sporty, spacious, fuel-efficient, and packed with great features, the VW Polo is a smart buy if your budget is within Rs. 10 lakhs.

Hyundai Elite i20

Price: Starts at Rs. 5.29 Lakhs (Ex-showroom Chennai)

The Hyundai Elite i20 is a great buy under the 10 lakh bracket! We�re not just saying this because it�s one good-looking premium hatch, but also because of the tonnes of great features, it comes with. I totally love the car�s fluid aesthetics, its spacious and comfy interiors, the smooth yet powerful driving experience it offers, and its fuel efficiency.

Budget � 20 Lakhs

Jeep Compass

Price: Starts at 15.18 Lakhs (Ex-showroom Chennai)

Combine a sporty design with a solid build and great off-roading capability and you�ll get the Jeep Compass. If you�re looking for a new set of wheels which will give you good fuel efficiency and a power-packed driving experience (especially for the road trips out of the city), then the Jeep Compass is a great buy within the Rs. 20 lakh bracket.

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Remember there a great many options under each budget category mentioned above. I�ve just listed my favourites under each budget category. Base your car buying decision on your budget, your needs, and your preferences.

Get A Car Loan For A Second Hand Car

Get A Car Loan For A Second-Hand Car: Wondering whether you can get a Car Loan for a second-hand ride? CEO Adhil Shetty breaks it down for you.
However, not everyone can afford the high EMIs and interest rates that come with regular Car Loans. This is exactly why the used car market is constantly on the upswing. If you�re one of those people looking to purchase a used car at an affordable price by taking out a Used Car Loan, then you�ve come to the right place.

Used Car Loans - Features and Benefits

• Immensely Pocket-Friendly- Explained in simple associative terms, a second-hand car will cost less, thus, the pre-owned car loan financing it will also be a lesser number compared to its new-car alternative. Meaning, smaller monthly instalments to contend with.
• Less Hassle, More Features- While most banks feature used car finance as an important component in their arsenal of products, the demand for it is naturally second to a new car loan. Thus, these products are customized to appear as customer friendly as possible. Meaning, lots of features and rebates at half the usual hassle associated with a new car loan.
• Used Cars Are a Lot More Fun- When it comes to a pre-owned car, the choice of models isn�t dependent on its current on-road price. What would seem like a hefty investment for a new car of a particular model, seems very reasonable in the case of a second-hand car of the same make. Plus, the prospect of depreciation in pre-owned cars is considerably less when compared to new cars, thus retaining its original value when you intend to resell it at a future date. Importantly, the insurance costs of a pre-owned car are lesser compared to a new car.