Car loan interest rates, charges compared1 min read . Updated: 23 Jul 2018, 10:22 AM IST
Do your homework and get rates from more than one lender before taking a car loan. Use this information to bargain further and make a smart choice
It is tempting to buy a new car, be it an upgrade, a first car or another car for the family. Whatever be the reason, a car loan makes the purchase easier. Car loans are usually of 3-5 years but some lenders may offer loans for up to 7 years too.
A loan for longer may mean smaller equated monthly instalments (EMIs), which makes the car seem more affordable, but overall, you pay more as interest. Don’t forget that a car is a depreciating asset, so taking a bigger loan may not be the best thing to do.
But if you take a car loan for a short duration, the EMIs will be heavy and non-payment will mean a blot on your credit report. Conditions apply to the loan amount also. For instance, some lenders give a loan for the full ex-showroom price of the car, while others may offer a loan up to 80%. Apart from the interest rate on a car loan, also take a look at the applicable processing fee and other charges.
A look at the applicable processing fee and other charges.