Frequently Asked Questions (FAQs) on Car Loan
Do Car loan interest rates vary from person to person? If so, why?
Banks give lower interest rate if,
- Employees who have salary accounts with the same bank
- Employees of top 5000 companies of India.
- Based on your income per month
How much loan can I get?
The amount of the loan depends upon:
- The cost of the vehicle.
- The type (standard/premium).
- The percentage financing offered.
How long does it take to process the loan after the submission of documents?
If all the required documents are in order, the process becomes fast. The processing will take anywhere between 2 to 7 days.
Can I get a car loan without the submission of income documents?
Yes, under the No Income Proof scheme offered by some banks.
Can I increase the amount of loan that I can take and how?
Yes, you can. By introducing a co-applicant, and clubbing your income with his/hers
Who qualifies as a guarantor?
The guarantor could be your father, mother, son, daughter, husband, brother, sister, son’s wife etc. But make sure these guarantors, should comply with the age and other such norms of the
Can the car loan be paid off, before the tenure is due?
Yes, up by pre-paying your loan amount. Also you may have to pay a small penalty, normally, a percentage of the loan amount that remains outstanding. Some banks however do not penalize you if you decide to pre-pay. So, this aspect has to be taken into consideration when you choose a bank to take loans from.
Can I change the tenure and amount of loan taken after the loan amount has been disbursed?
Yes you can change the tenure and amount of the loan. But this would imply that the interest rate and the amount of installment will change accordingly.
Can I sell my car before I repay my loan?
NO. Your car cannot be sold unless the loan amount is repaid fully. Also, an NOC is required from the banks before you can sell the car.
Are car-accessories also financed?
Most banks do not finance car-accessories other than those which are factory fitted. But, some may finance music-systems and other such expensive accessories.
What is an Exchange Scheme?
Some dealers may offer you an exchange scheme whereby your existing car can be upgraded to a new one. The dealer will purchase your car at a price depending on the model, year and the condition of the car. The value of your old car is then adjusted against the purchase price of the new car. You could also get the balance amount financed.
Will I be financed for insurance and registration?
Mostly, Insurance and registration are not covered by most financiers.
What happens if the car meets with an accident?
- Firstly, inform the insurance company.
- A surveyor is sent to assess the extent of damages to the car.
- Claim is then processed and paid directly to the banks, unless you have taken an NOC from the banks, in which case the payment will be made by the insurance company in your favour.
- The bank normally gives you an NOC if you are regular in your payments. In case of a complete loss, the bank would receive the payment directly from the insurance company.