The desire to park a four wheeler in front of your house, the passion to drive the favourite car, the joy of travelling with your family, all are unbeatable and cannot be replaced by anything. If you too share the same dreams and are planning to fulfill these dreams then arranging finance won’t be difficult with the availability of car loan. Due to the availability of car loan, it becomes easy to get the vehicle without affecting the daily routine expenditure. The financing company pays on behalf of the customer to the dealer and the customer has to repay this amount to the financer in parts making it convenient and easy for the customer.
On this credit provided, the lender charges interest that is the percentage of the amount availed under the CL. This interest amount along with the principal amount is broken into installments that are to be paid every month until the tenure lasts. The car loan rates variates from lender to lender and therefore, before availing loan from any lender check the CL interest rates. This will help you get the credit at a lower price and may help you lower your EMI payment.
The repayment of the Car loan will not be tough if you plan your expenses accordingly. Based on the price of the vehicle, the loan amount is disbursed and how much amount has been disbursed by the bank decides your repayment amount. You can plan your budget by calculating the EMI amount on the lending rate. The EMI amount can be calculated using the CL EMI Calculator. The calculator is an online device that helps in the computation of the total repayment amount. It makes calculation easy and provides result quickly. On insertion of the loan amount, tenure and interest percent, the calculator calculate the result. Based on which you can compare and take the decision of whether or not to take a loan from the particular lender.
The interest percent on CL depends on various factors and they are as follows:
Factors Affecting Car Loan Rates
- Credit Score - The lenders take high interest in the credit score of the applicant. It plays a crucial role in finalising the deal. It is an important factor that determines whether the individual is eligible to avail the facility or not.
- Income is to Debt Ratio - The other factor that controls the interest rate is the amount of money the applicant owes to others. The lender views the amount of money that the applicant has earned in that specific period. Through this, the lender realizes how much time the borrower will take to repay the loan.
- Credit Size and Repayment - The amount of down payment is indirectly related to car loan interest rate. Higher the down payment, lower will be the lending rate.
- Age of Vehicle - It is the most important points with respect to used cars. If the car is new it will attract low interest charges. Whereas, on the used car, the charge would bear direct relationship with your car’s age. The older the car higher the rates.
- Loan Repayment Tenure - The duration also acts as a deciding factor while determining the rate. If the tenure is long then the borrower has to pay interest at high rates and vice-versa.
These factors decide at what interest the customer can get the CL. Also, for the approval of credit application, the customer has to submit the necessary documents. It is only after the verification of the documents that application is approved. The documents that are to be presented are as follows:
- Age proof
- ID proof
- Application form
- Photograph
- Residence proof
- Income proof
- Bank statement
- Signature verification proof
- Pro-forma Invoice or Rate List
So your dream of owning a Car loan rates can be a reality with the availability of this credit facility. It makes possible for people to give grounds to their wishes and make them come true. Though yes, a borrower has to pay an extra amount in form of interest but this prevents the burden of one time huge payment. The breakdown of repayment amount makes it comfortable for the borrower to ease things without affecting the routine life.
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