After securing a job and a place to live, the first and foremost requirement of every person is to ow a car; in order to make life easier. Public transportation can be very hectic and tiring when t comes to using it everyday, and might even cause a but more of money and even security problems (in case of women). All such reasons add to the need of owning your own car. But buying car is no piece of cake. You need a big amount of money to consider buying a second hand car even, let alone a new one.
Now for this, you need to secure a good amount of money from any bank or a non-financial working organization that can offer you a billan. Billan not only helps you to achieve your dream but also execute it in an easy way. Billans are offered on new and old cars both, however, the interest rate is different; that is comparatively more for new cars than for second hand ones. These loans can be secured by paying monthly fixed amount of installments which makes it easier for people to afford a car. It is important to consider that every car loan insists a number of eligibility conditions that require a confirmed source of income, place of living, minimum salary and the type of employment. The amount of your car loan depends on your age, or mostly on your income.
Know your needs
Before going out to any company or bank for loan, define a certain amount for yourself. Draw out an overview of everything you think might be included while you’re out for buying a car, and calculate a rough sum. It is important to only go for the need of the hour, which roughly translates to the exact amount of money that is required. You should never opt for more money which could later cause you any trouble. Create an estimated amount and try not to borrow any more or less than that amount for our car loan.
Documents to file for a Car Loan:
- Proof to confirm your identity. It can be your national ID, A permanent account number, passport, or a driving license.
- Birth for or Identity Card, Voter ID and an address proof of your residence.
- Valid and original car documents.
- Passport photographs.
- Income proof certificate or statements that can be of your 3 or 6 month salary, tax slip etc.
Importance of Hypothecation
While going for the easy way, the individual acquiring the loan has to pledge by signing a contract that he has officially shared his rights of the car with the lender till he has returned the loan. This sharing of rights gives the lender the authority to seize his car or any asset if by chance the individual as not been able to return the amount. Hypothecation is then nullified by reporting to the regional office along with car insurance documents, a no objection certificate and the residential address. Hypothecation secures the lender’s money so that in any misunderstanding or unpleasant circumstances, the lender has the right to seize assets. To understand this process and go through it in a better way, you can even get professional help by any property lawyers or chartered accountants who can actually explain and advise you better through out the whole process.
Always estimate the total amount on your behalf even if the lender or contractor hasn’t done so. Most of the time, people who are opting for loans are tight with money, and they are not aware that the lenders also have their fee money, along with the interest that is charged by the company or the bank, and also the start and closure of processing the loan. All this cost is included in the loan or is asked for as a down payment to secure the car loan.
Pick out the right Company/Bank
It is also important to pick out the best suitable bank or company from which you are applying for a loan. This is because if you find a far off place, the bank will not be suitable to you since the bank requires a lot of physical appearance and handles the matters face to face. You can also take the help of a loan broker. A broker will set out the best places for you that are best suitable and convenient for you to apply to a loan for and resultingly, you can even receive loan offers. This will make your billån process easier.
In most companies and banks, there are several options of selecting the duration and inversely, the amount of monthly installments. The more the amount of an installment, the less the duration will be. For people who are not at ease with the short period payback, the long duration option is available which can extend up to 6-7 years, at an average. But there’s a catch to this, the longer period you choose, the more interest ou have to pay to the bank or the company. This is why loan brokers or professionals always advise to opt for the short duration payback in order to avoid high interest payback.
Billan is easier than filing for a home loan, as it involves a large amount of money, greater duration of payback and a high amount of interest money. Home loans also limit conditions whereas Billan only involves hypothecation which is a lot simpler and easier for people. It is important to note that the total cost should always be estimated and kept in mind, meaning the startup fee and closure fee along with any addition of taxes should be estimated and even asked by any professional so that it does not result in any problem later on. You only get to title the car to your name one you have paid the full amount of car loan. Most people always prefer to opt for a loan that is financed by the dealer because of its quick service and convenience.