Car Loan
Over time, owning a car has moved from being a luxury to a necessity. If you are looking forward to bring a new car home, Vinayak Associate has got you covered with our car loans.
What Is A Car Loan?
The meaning of a car loan is pretty self-explanatory. It is a loan taken solely for the purpose of purchasing a car. Here, the borrower gets to use the car once it is purchased out of the loan money and the car acts as collateral.
This means that the lender will retain the ownership of the car until the final payment is made and the borrower will lose the ownership of the car if they fail to pay back the loan amount (with interest) in pre-decided installments. At Vinayak Associate, we provide car loans for new and pre-owned cars to our customers at easy monthly installments.
How Does Car Loan Work?
The working of a car loan is more or less similar to that of a secured loan where you obtain funds by providing collateral. As you approach us for the loan and state your requirements, we take some important factors into consideration for ascertaining your eligibility, including (but not limited to):
- Identity proof (PAN card, passport, driving license, etc.)
- Address proof
- Car documents
- Age proof
- Proof of income (3 months’ salary slips, income tax return, 6 months’ salary account statement, proof of business revenue, etc.)
- Copy of car insurance
- Your age
- Your area of residence
- Your area of residence
- Your credit score
- Your credit history
- Your employment type
These factors determine the amount of your car loan and the term for the same. Ideally, you can expect your loan term to be within the range of 24 to 76 months. Also, these factors will determine the Annual Percentage Rate (APR) at which you will be required to pay your interest and the amount you will need to provide as a down payment.
Once we have checked your eligibility for the car loan, you will need to provide us with the following documents to get the loan processed:
The meaning of a car loan is pretty self-explanatory.
Hypothecation Of Car
In the case of a car loan, your car gets hypothecated to us once you purchase the car. This means that while you can take the car home and start using it, its ownership remains with us until you have paid the last installment. Please note that hypothecation gives us the right to seize your car if you fail to repay the loan.
When you purchase the car, the hypothecation letter will be an important part of registration. You can change the owner’s name in the registration once you have paid all your dues. For this, you will have to visit the Regional Transport Office (RTO) along with your car insurance papers, address, proof, and No Objection Certificate (NOC).
Costs Involved
Depending on the loan, you will be required to pay some charges throughout the course of your car loan. Some of these charges include processing fees, early loan closure fees, and part payment fees.
Processing fees are charged for getting your car loan application processed and would range around 0.4% – 1% of your loan amount. If you are willing to pay off the loan before the term ends, you will need to pay early loan fees for the same, amounting to 5% – 6% of the loan amount.
If you want to reduce your liability by paying off a part of your principal amount, you will be charged with part payment fees for the same, amounting to 3% – 6% of the loan, depending on the time left for the term to end.
It is no longer difficult to own the car you have always wanted to drive. All you need to do is contact us and allow us to provide you with a helping hand for easing your financial troubles!
