Learn How to Avail a Car Loan

by Rahul Aggarwal Blogger

While being able to find the right car can be challenging, deciding how to pay for it is no less. People mostly prefer getting their new car purchase financed for the ease and flexibility of payment. Besides, it also lets them get their favourite car home without having to exhaust all their savings, which makes car finance the smart choice.

If you plan to buy a new NEXA car, you can opt for easy car finance by Maruti Suzuki Smart Finance, which is a one-stop destination for all your car financing needs. You can access a plethora of EMI plans, pre-approved loans, and car loan offers at Maruti Suzuki Smart Finance and get your loan disbursed in 4 simple steps. However, before you start searching for the right finance scheme, it is important that you understand what a car loan entails and what are the factors that you should consider for the same.

How Does a Car Loan Work?

A car loan refers to the money you borrow from a bank or Non-Banking Financial Company (NBFC) to buy a new car. All you need to do is pay a fraction of the total car cost as the down payment and the rest of the amount is paid by the lender. An interest in charged as a fee for borrowing the money, the rate of which is decided at the time of availing the loan, and you are required to repay the loan amount as well as interest in the form of equated monthly instalments (EMIs) over a set period of time (loan tenure).

Eligibility to Apply for a Car Loan

Both self-employed and salaried individuals can apply for a car loan, however, subject to the fulfilment of the eligibility criteria set forth by the lender. While the eligibility criteria may vary from lender to lender, it generally includes:

● Applicant should be a resident of India between the ages of 18 and 65 years.

● They should have a minimum monthly income of Rs. 10,000 (may vary with different lenders).

● They should be able to show residential stability of a minimum of 1 year.

● They should be a salaried or self-employed person with a minimum of 2-3 years of experience.

Factors to Consider When Applying for a Car Loan

While it is easy to apply for a loan for your new car with Maruti Suzuki Smart Finance, there are certain factors that you should take into account to ensure that you find a good finance scheme:

1. Interest Rate

The interest rate on a car loan depends on the applicant's profile, loan tenure, credit score, loan amount, etc. However, it is essential that you check and compare the interest rates offered by different lenders to find the best option.

2. EMI Amount

Calculating the EMI amount you will have to pay is crucial to ensuring the affordability of the loan. Use the EMI calculator available at Maruti Suzuki Smart Finance to check how much a loan will actually cost you. As a car loan is a long-term commitment, you need to be sure that the EMI will not become a burden further down the line.

3. Loan Tenure

A shorter loan tenure means less outflow of interest but a higher EMI, while in a longer tenure you pay a smaller EMI but the amount you pay as interest is also more. Try and choose the shortest possible term where the EMI is still affordable for you.

4. Down payment

A higher sum paid as a down payment reduces the amount you need to get financed and the lower the loan amount is, the less you have to pay as interest for it.

5. Miscellaneous Charges

In addition to interest rate, there are various other charges like loan processing fee, insurance, pre-closure/foreclosure charges, stamp duty, etc. that add up to your overall loan or down payment amount. Hence, carefully check all the details before signing the deal.

With these basics in mind, you can easily start browsing for the best finance deal for buying your new car.