The car loan is a popular tool for owning a dream four wheeler which is being adopted by thousands of Indians who qualify the basic income eligibility criteria. This is pretty simple and easy to avail loan wherein the financier pays for the majority amount of the value of the car and the buyer needs to put in only a small portion as the down payment. The financiers also have tie ups with manufacturers in order to provide more attractive deals to the customer. The primary reason behind the growing acceptability of car loans over the traditional means of saving first is the host of simple and allied benefits that come along with it.
Wider Eligibility: Due to the increased competition among the financiers the customers have benefited in terms of greater coverage of population under the current eligibility criteria. Anyone who has the basic minimum source of income can now avail a car loan from banks and other financial institutions.
Simplified Procedure: The prevailing procedures for availing car loan have been greatly simplified in order to woo more number of people into taking the car loan. The documentation and approval process takes less than a day and in some cases on the spot approval is also possible.
Lower margin Money: Currently the banks are willing to finance up to 95% of the on road price of the car which implies that the buyer does not face the burden of additional expenditure in accessories, insurance and registration. Thus people with minimal funds can also now own a car easily with the new schemes.
Car as Collateral: in case of a car loan the vehicle purchased itself becomes the collateral eliminating the need of providing other property as additional security for the loan. Thus in the event of a default it is only the car that shall be repossessed by the bank and not any other asset of the borrower.
Complete Ownership: As against a Lease scheme the car loan lets the borrower be the absolute owner of the vehicle and undertake whatever modifications required to suit the personal taste. Additionally buying the car through a car loan allows unlimited usage which is not possible in a lease scheme.
Customized EMIs: The financiers today allow the borrower to customize the EMI as per the repayment capacity. By paying a bigger margin amount one can easily reduce the EMI being spread over the stipulated maximum tenure of the loan. The processing fee for car loans has also come down below 2% of the total cost in most cases.
Dealer Benefits: The financiers through tie ups can provide the buyer a great deal through discounts on the price and freebies including accessories, insurance and registration charges. The dealers and agents are ready to forgo a portion of their commission in the interest of increasing sales volume which works to the benefit of the customer ultimately.
With the host of these wonderful features and advantages that accompany a car loan it is certainly a preferred route for owning a four wheeler.