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2 mins Read | 1 Year Ago

What parameters should you consider while applying for a Car Loan?

What parameters should you consider while applying for a Car Loan?

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You should consider certain crucial aspects such as your needs, expectations and affordability before applying for a Car Loan.

Key factors:

1. Determine the status of your Credit Score:

Your credit score plays an important role during the loan application process. A poor credit score increases the chances of your application being rejected. As such, it is a wise move to check your Credit Score before applying for a Car Loan online. 

2. Type of Interest:

There are generally two types of interest rates on your Car Loan. One is Fixed or Flat while the other is Floating. Both vary in pricing and offer diverse benefits. So, it is a good practice to initiate in-depth research and come to a conclusion as to which rate is best suited for you as per your convenience and budget. Also, check for potential lenders and compare their interest rates to select the most affordable one. 

3. Say Yes to a Fixed Tenure:

The chosen tenure affects your Car Loan interest rate. Generally, the longer the tenure, the higher the interest paid. So, make sure you choose a shorter tenure to secure an affordable repayment schedule and avoid paying a long-drawn interest that unnecessarily adds to the financial crunch.

4. Learn about Prepayment Deals: 

Prepayment enables the applicant to pay off the Car loan without serving the entire tenure. This eventually saves you from high interest rates too. However, choosing a lender carefully is important to save oneself higher penalties on foreclosure.

Ask your lender beforehand about their prepayment deals and penalties, if any. A penalty-free option is much more flexible and helps you pay off your Car Loan on time.

5. Evaluate Car Loan charges: 

The loan provider may ask you to pay charges when you opt for a Car Loan. These charges may include Stamp Duty, Processing Fee, Registration Certificate (RC), Collection charges, Prepayment charges and Late Payment Fee among others. If you are looking to save on costs, finding great online deals would be useful. Also, do not forget to look into the CIBIL report online.

6. Pre-approved Car Loan:

You should also explore the option of digital disbursement of Car Loans. For instance, ICICI Bank offers Pre-approved Car Loans. This offer is applicable only to select existing ICICI Bank customers. A Pre-approved Car Loan customer can obtain an Approval Letter online through Internet Banking services, thus, making the entire process paperless and hassle-free.

Key takeaway: 

Opting for a Car Loan that suits your preferences can be tough but not with ICICI Bank. This Bank provides a comprehensive range of Car Loans and a flexible package for you to choose from that can help you make a customised and wiser choice. So, do not forget to visit ICICI Bank’s website for more details and assistance while securing the best Car Loan. 

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