Car Loan FAQs For New Buyers

Buying your first car? Now, that’s a Woohoo moment! After all, a car gives you freedom and convenience. But for many first-time buyers, paying the full amount upfront isn’t always possible. That’s where car loans come in.

If you are new buyers and worrying about financing, here is a list of frequently asked questions put together to help you understand car loans better.

Will I Need Collateral For The Car Loan?

For a car loan, your new car acts as collateral, and your bank must endorse your registration certificate. But stop worrying. Once you repay the loan, you will have the certificate back. Your car will finally be your sole property because the bank will then cancel the endorsement.

What Documents Do I Require To Submit When Applying For A Car Loan?

Submit the usual ones while availing a car loan. It means your PAN and Aadhaar card, or other such documents. Some documents may differ from lender to lender, so it’s better to check with your lending institution.

What Is The Tenure Of A Car Loan?

Car loan tenures usually range from 1 to 7 years. Longer tenure means smaller EMIs, but you’ll pay more interest in total. On the other hand, the shorter tenure means higher EMIs but lower overall cost.

Can I Repay The Loan Early?

Yes, of course. After all, most lenders allow prepayment, but they may charge a small fee. It is best to check the lender’s policy before signing the loan agreement.

What Happens If I Miss Emi?

Of course, you must pay a penalty for missing your EMI, and it also affects your credit score. If you’re facing difficulties, contact your lender. They may offer a repayment solution.

Can I Get A Loan Without A Credit History?

Some lenders are darlings, and they may provide a loan without a credit history or a low credit score. If you don’t have a credit history, some lenders may ask for a co-applicant, or offer a loan at a slightly higher interest rate.

Do I Need A Loan Guarantor?

Of course, you will need a loan guarantor if you fail to meet eligibility criteria set by the lending institutions, such as monthly income or credit score.

Under What Conditions Can My Car Loan Application Be Rejected?

Your bank can reject your application if you have a bad credit score, are a defaulter of repayments, or don’t meet eligibility criteria stated by your lending institute.

Will I Get Any Tax Benefits For A Car Loan?

No. Although cars can uplift your social status, unlike a home loan, a car loan does not give you any tax benefits.

So, next time you plan to buy your first car, get a car loan without a second thought. Give our blog a second read. It will help you make the right decision for a joyful ride on the road. So, are you ready to Vroom?