- First, check the rate your existing bank is willing to offer, then visit online loan providers to compare the rates offered by others. Banks offer preferential rates to existing customers.
- Check your EMI affordability by deducting your expenses from net monthly income.
- Total EMI on all loans should not exceed 40 per cent of your net income.
- Loans are available for up to seven-year tenure. Select the shortest tenure you can afford as a longer tenure increases interest cost.
- Many lenders offer to finance up to 100 per cent of the vehicle's cost.
- Enquire about processing fee. Many lenders reduce or waive it during festive season.
- Prepaying the loan is a good idea. But consider the charges, limits, etc, on prepayment of car loans. Usually, fixed-rate car loans come with prepayment charges, sometimes as high as 5-6 per cent of outstanding amount.
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