Car Loan checklist: Must-ask questions before you seal the deal

While a Car Loan enables you to fulfill your dream of buying a car without paying the price upfront, it is a long-term commitment. These are the questions you must ask before taking a Car Loan to understand it fully.

1. What is the maximum amount you can borrow from the bank?

Banks provide Car Loans only up to a certain percentage of your car's ex-showroom price. For example, if a bank offers a loan for 80% of your car's ex-showroom price, you need to pay the remaining 20% yourself. Confirm the loan amount you are eligible for before you sign the papers.

Apply for an Axis Bank New Car Loan and get up to 100% on-road funding for buying your dream car. You can also get several attractive benefits like comfortable tenures up to 7 years, competitive interest rates starting at 9.2% p.a., and Axis eDGE reward points.

2. What interest rate will be charged on your loan?

This is one of the most important questions to ask before taking a Car Loan. The interest on your loan decides the total cost of the car that you have to pay. You can calculate your future EMIs using tools like a Car Loan EMI Calculator to get an idea of whether the loan is affordable to you.

3. What would be the tenure of your Car Loan?

Ask your bank for a comfortable tenure on your loan. The longer the tenure of your loan, the higher will be your interest payment. Loans with shorter durations have higher monthly instalments, but ultimately, they are more affordable as the interest cost gets reduced significantly.

4. How much do you need to pay as the down payment?

Bank offers loans for a percentage of your car's cost and you have to pay the balance as a down payment. Enquire the amount of down payment as you will need to keep the money ready before you get the loan.

5. What are the eligibility criteria for Car Loans?

Every bank sets eligibility requirements for Car Loans to make sure that it provides loans to creditworthy customers. The criteria could be related to your age, income, credit score or credit history. The criteria depend on the loan amount and whether you are looking for a Used Car Loan or a New Car Loan. If you don't satisfy a particular criterion, you can take corrective action before you apply for a loan.

Also Read: How to get pre-approved for a Car Loan?

Conclusion

A Car Loan is an excellent way of buying your dream car without breaking the bank. However, taking up a Car Loan should be an informed decision. You must know everything about the liability you are going to assume, such as its interest rate, duration, monthly dues, and eligibility requirements. By knowing these details, you can be mentally and financially prepared to pay off your Car Loan on time.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.