How to compare Car Loans?
It’s taken you a while to decide, but you have finally zeroed in on the car of your dreams. You love the car’s features, its drivability and space, and can’t wait to get behind the wheel and take your family for a spin.
You are unwilling to pay cash down, so the dealer has recommended a Car Loan as a means to purchase your dream car. But you want to make sure it’s the best deal in the market. There are many players offering Car Loans at competitive rates, so you should weigh your options carefully before going in for a Car Loan.
You can visit each bank to make a Car Loan interest rate comparison. But that’s rather cumbersome, and you don’t have the time, so you can easily make an online Car Loan comparison. Many web sites allow you to make such comparisons, so don’t hesitate to hit that computer!
So, what factors should you consider while making a Car Loans comparison?
- Interest rate: When you make a Car Loan finance comparison, the priority would be the interest rate. Each bank offers different rates for a Car Loan, as we have mentioned earlier, so it’s a good idea to make a careful Car Loan interest rate comparison. You can pick the bank that offers the lowest rate. You must also remember that banks don’t always offer the same rates to all customers. It can depend on a host of factors like your income, any other loans that you may have taken, and so on.
- Processing fees: Another thing you should keep in mind while making a Car Loan comparison is processing fees, which can vary across banks. This is not a very large amount, but every bit counts when you’re taking a Car Loan.
- EMIs: EMI is short for equated monthly instalment, which is the amount you pay each month to repay your loan. This depends on the tenure of the loan and interest rates. Longer the tenure, lower the EMI, but your interest payments will be higher in that case. You should choose a Car Loan with a tenure that will allow you to pay EMIs comfortably. But don’t stretch out the tenure too long – that will be costly in the long run.
HDFC Bank offers Car Loans starting at pocket-friendly EMIs as low as Rs 1,111 per lac*.
- Loan to down payment value:Another thing to learn about how to compare Car Loans is: what percentage of the car’s cost will the bank give you as a Car Loan? Is it sufficient to make your dream purchase comfortably? Do you have to make a large down payment? Many banks expect you to pay a percentage of the value of the car (anywhere from 5% to 15%) upfront before they disburse you a Car Loan for the rest. HDFC Bank offers up to 100% on-road funding for a new car so that you don’t have to worry about the down payment.
- Processing:How quickly can you get a Car Loan? Is the process simple and easy? Is the bank asking you for a lot of documentation? Ideally, getting a Car Loan should be a simple process. HDFC Bank provides approvals for Car Loans in 30 minutes with minimal documentation. ZipDrive is an instant new Car Loan exclusively for HDFC Bank customers. It’s an entirely digital Car Loan and available online 24x7 via NetBanking!
- Get the model right: Did you know that some banks charge different interest rates on various models of cars? If you choose a less popular or old model of car, you could end up paying more for your Car Loan. So when you make your Car Loan finance comparison, make sure you take this factor into account.
- Prepayment or foreclosure charges:What if you suddenly came into some cash and want to prepay your Car Loan? If you have the money, it makes sense to prepay a Car Loan since you can save on interest payments. Many car owners prefer the option of prepaying Car Loans in part or full. Does your bank allow you to do that? What are the charges for prepayment of a loan? HDFC Bank offers Car Loans with zero foreclosure charges* giving you the freedom to manage your loan better.
Read more about Car Loan prepayment here.
- Additional features:Some loans come with significant other features that give it an edge. For example, HDFC Bank offers Rs 5 lakh as personal accident cover, Rs 5 lakh as permanent disability cover and Rs 1 lakh as accident hospitalisation cover with its Car Loans. You can also get a top-up loan after you have completed paying nine monthly instalments. You can get more details on the features
* Terms & conditions apply — Car Loan disbursal at the sole discretion of HDFC Bank Ltd. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances
* T&C apply. Other charges and taxes as applicable. This scheme is part of Step Up cum Baloon EMI for 84 months. Nil FC after 50% tenure completion subject to minimum 24 months and Nil cheque bounce. Insurance bundled with the offer.