Each one of us hopes to become a car owner someday. It is one of the first things we aspire to buy as soon as we start working. But buying a car costs nothing less than a few lakhs. Plus there are added expenses of on-road taxes, accessories, insurance and so on and so forth. All these expenses can cause a huge dent into your savings. Thankfully, today it is possible to take out a car loan. Many banks and NBFC offer great deals on loans for cars, through which you can own your dream car without touching your savings. Here are the top 5 reasons to opt for a loan to buy a car.
You can get maximum financing: Gone are the days when one had to pay a huge amount as down payment. Today, most banks provide 90-95% financing on the on-road price on your car loan in India. This amount covers almost all the expenses related to the purchase of the car, be it registration, insurance, taxes or accessories. This way, you can purchase your dream car without having to arrange for a hefty down-payment amount.
You can choose an affordable EMI: The bank expects you to repay your loan in EMIs at a fixed or floating rate of interest (as per your choice) over a considerably long tenure. Typically, you could get anywhere between 60- 84 months to repay your car loan, which means the EMI (equated monthly instalment) amount would be rather small. Also, as your salary increases over the tenure of your loan, the EMIs also become more and more affordable.
You don’t have to compromise on the car type: Many people decide to wait a few years until they can afford their dream car. They opt to purchase a small hatchback instead of the comfortable sedan or a luxury SUV. But with the availability of auto loans, you can go ahead and purchase your dream car without having to compromise on the size, brand or type. Several banks offer car financing up to ₹10,000,000 (₹1 crore).
Banks have tie-ups with car dealers: Most banks are tied up with various auto dealers which means, you can eliminate the process of running around from one dealership to another to get the best quote on the vehicle. Besides, if you are taking out a loan from a bank with which you have a working relationship, chances are that you could be offered some discounts, processing fees could be reduced or waived and interest rates could also be reduced.
Minimal documentation: Car finance is processed instantly; banks no longer ask for detailed documentation to process your loan. Moreover, this loan is usually an unsecured loan so you do not have to provide any collateral against it. You just have to provide the basic documents such as your address proof, ID proof, employment proof or proof of business and salary slips for your loan to be passed.