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Why Choose a Vehicle Loan

  • One can opt for new or used car loan depending upon the need and the kind of car requirement. Though, most people prefer a car loan over new cars and not the second hand ones
  • Car loan option in India, for a majority, is an alternative that lets them purchase a car which is better than the one available in their budget since the car loan approval is quick.
  • Car loans in India generally provide a fixed rate of interest option while repayment through EMIs. This keeps you assured of a fixed repayable amount on a monthly basis towards the car loan, facilitating better budget planning without disturbing your usual expenses

vehicle Loan

To begin with, it works out to be much cheaper than a personal loan, which is usually issued at interest rates in the range of 12-25 per cent. This is generally on a daily or a monthly reducing balance method. The rate at which LAP is issued is in the 12.50 per cent-15.75 per cent range. The lower rate is partly because the lending entity has a security in the form of the housing mortgage vis-a-vis a personal loan that is given without any security. The tenure for LAP is longer than that for a personal loan. LAP is given for tenure of 1-15 years. Since the rate of interest is lower, many a times, equated monthly installments of LAP turn out to be cheaper than those under personal loans. But the tenure has to be lower than the residual age of the property as approved by the valuer of the Bank. The criteria for LAP are the same as those for any home loan. Part prepayment as well as full prepayment of LAP is also allowed by most lending institutions; many lending institutions do no levy extra charges on prepayment. The eligibility requirements of the Bank for a customer to qualify for this product are similar to those of a normal home loan. LAP is either given as an overdraft facility (which means it is for 1 year and renewed every year) or for as a normal loan.

There was a time when owning a car was a luxury not all could afford to have. Buying a car was a life milestone for everyone who could shell out those huge amounts of money all at once to buy their dream car. With growing times, changing demographics and emerging car loan lenders, for a majority of the Indian middle class, owning a car today is no longer a luxury, but in fact a necessity made possible by taking a car loan.

You cannot imagine living without a car because that would restrict you form going places for work, duties or leisure, hindering a good social and professional life. But with newer technologies and lesser resources, the cost of cars are on a rise, often making it extremely difficult for the average individual to purchase their vehicle outright only using ones savings. Therefore, viewing the huge demand for financing both used and new cars, leading loan lenders in India offer car loans, which are floated products, which enable you to purchase your car and pay off the car loan amount borrowed bit by bit through car loan EMIs or installments

In India, apart from the issue that paying such a huge sum of cash may disturb one's budget, massive purchases with liquid cash could put you on the Income Tax department's radar as well. When you get a car loan to pay for your car, you manage to retain your savings for other current and future expenses. One of the greatest car loan benefits in India that the loan is secured against the car itself, so, you do not have to mortgage your property or other assets to get a car loan. You also get to use your car while you are servicing the car loan term, so a few years down the line you have added to your original savings and have the opportunity to own the car having paid off your car loan completely. This gives you the chance to augment crucial credit history by procuring a car loan and strictly adhering to the repayment cycle. A good credit history including timely payments and cleared debts help you obtain further loans in the future. Car loans, therefore, are a very safe and certain way of purchasing your own car.