Bank finance articles and tips

Car loan is one of the finest loans, used to purchase any old or new vehicle. Regardless of what model you want to buy, the loan can help you materialize your dream perfectly. There are many things that a borrower has to understand in the context of obtaining car loans.

Since lump sum payment is not possible, the borrowers are allowed to pay off the finance through installment. The period of installment is synchronized with tenure of the finance. It is must not to fail in payment of the installment or else you will face late payment charge. It will also demean your credit history significantly.

Loan Amount Offered – You can be offered loan amount up to Rs 10 lakhs and more depending on your credit worthiness. There are banks such as HDFC, ICICI, SBI, Citibank and Kotak Mahindra which are offering vehicle finance.

Tenure Of The Loan – Generally, the vehicle finance is offered for the tenure of 38 months. Within the period allowed, a borrower has to return the loan borrowed to the lender in installment. The tenure period of the loan also depends on the credit worthiness and income of the borrower.

Documentation – This is one of the most important rules to follow by any borrower in the context of availing car finance. According to the documentable procedures, any borrower has to submit these following mentioned credentials:-

• Proof of income
• Proof of age
• Address proof
• Bank statement
• Copy of IT Return

Verification Of The Documents – This is the last procedure taken by the bank. It is necessary to confirm that the borrower has submitted right document. The verification also confirms that the information furnished in the documents holds true. If anything found against the details of the documents, the loan is not approved. On the other hand, the loan is considered to sanction followed by satisfactory verification of the credentials.
In the context of borrowing, car loan interest rate is one of the most important things to consider. Many banks have their respective terms over the applicable rate of interest. Hence it is must of you to study interest rates of few other banks before you come up with an idea of choosing a cheap vehicle loan.

You need to study hard on your needs. What model you want to choose? How much down payment you have for the car loan? Because no bank can finance your car 100%, it is must to have almost 20% of the entire loan as down payment. For instance, if a bank offers 85% car finance, the rest is down payment that you need to arrange on your end.