—Ashwin Chatterjee

Loans provided by relatives do not qualify for tax rebate on the principal repaid under section 80C of the Income-tax Act. Your brother can issue a demand note on your behalf in favour of the builder and a loan agreement can be drafted based on that.

What are the factors that affect the price of a car? How can I negotiate on my car loan?

—Lalitha Wamanan

Some of the general aspects that finally add up to the total cost of a car include fuel, city of purchase, colour options, car insurance, add-on features such as power steering, safety systems and other requirement-based luxury accessories.

To get the best deal, make sure your timing is right. Buy a car during the festive season or towards the end of the year when there are attractive interest rates on car loans and dealer discounts, such as an insurance premium waiver option, free luxury add-ons and cash discounts.

If you are planning to sell your old car on which you made no insurance claims, then you can reduce the cost on your insurance for the new car you are buying by as much as 60%. All you need to do for this is to obtain a no-claim bonus (NCB) certificate from your previous insurer. In most cases, the official manufacturer’s insurance company works out cheaper. However, if you are happy with your current insurer, just carry your new car’s invoice and chassis number. Your NCB will be put to good use and you could get a reduction in premium and on-the-spot cover.

I have dues on three credit cards. Some of my friends are advising me to take a personal loan to close these. Is it advisable?

—Madhu Vardhan

Before taking a personal loan, consider liquidating your assets, such as idle cash in your savings account, or gold that has multiplied several times in value. Yet another alternative is to get a loan against the value of your assets such as gold, shares, insurance policy and Public Provident Fund. These would be cheaper than a personal loan. If these are not viable, your next best option would be a personal loan as the interest rate on it would be much less than that on your credit cards.

I am planning to take a personal loan of Rs5 lakh. Can I apply for the loan along with somebody else since my income may not be sufficient to avail the loan?

—Suneela P.

You should go ahead and get on a co-applicant for your personal loan. The co-applicant’s income will be added to yours and the loan amount will be sanctioned on the collective income.

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