Vehicle loans are usually short term loans wherein the borrower’s car is pledged as collateral against the amount received. The purpose of a vehicle loan is to allow the borrower to finance their vehicle purchase. Vehicle loans have dramatically boosted the chances of making vehicles affordable for many. All one needs to do is pay a fraction of the vehicle cost as a down payment, and then they are good to go with the remaining amount being sanctioned via a vehicle loan. Finnable is a reliable NBFC licensed by RBI that provides hassle-free vehicle loans to finance the purchase of vehicles.
- Get your credit score checked:
Source of income, credit score and other such factors are used to determine the interest rates for the loans. For example, if an individual has a high income but lacks a credit score, their interest rates will be higher, or the tenure for the loan will be less.
- Assess your EMI affordability:
While taking a vehicle loan, one should be aware of all the mandatory monthly expenses. The best practice is to deduct these mandatory expenses from the stable monthly income, and then the balance income can support in paying off the EMIs. Once the borrower knows his EMI affordability, he can then select and customise the terms as per his requirements.
- Processing Fee awareness:
The vehicle loan processing may go up to Rs. 10,000. The vendor may use moto to reduce the processing fees during a specific period. However, you need to be vigilant with respect to the processing fees being waived off. Sometimes, vendors cheekily adjust the waived off processing fee in the interest payments.
- Check for foreclosure or pre-payment charges:
By pre-paying your loan, you may get a chance to have your interest charges reduced. However, many vendors levy pre-payment charges on vehicle loans. These charges can go up to 6% on your outstanding principal amount. Some vendors also restrict the number of pre-payments you can make. Therefore, be wise while choosing the vendor who provides vehicle loans with the least restrictions.
LTV is that proportion of the vehicle’s purchase price which the lender will finance. If you can afford to pay a higher down payment, that will allow you to get shorter tenure and lower interest rates. Make sure to calculate your down payment amount and the interest you can afford monthly. If not done wisely, these may lead to exhausting emergency funds.
Once such factors are considered, one may choose to go ahead with the application for a vehicle loan. Finnable is one such fin-tech start-up registered with the RBI and provides hassle-free vehicle loans quickly. All one needs to do is log on to their website and create a profile. Next, comply with the KYC procedure and provide the required details. Then select the purpose of the loan, the amount, the tenure and provide the required documents needed to process this. Once everything checks out, the loan amount will be disbursed into your account.