When you avail of a car loan, you will be provided with a list of features and benefits. All the banks offer a different set of features and benefits that makes their car loan unique, below listed are some of the common features and benefits that you will get to enjoy when you opt for car loans.
Lower interest rate: Being a secured loan, car loans are generally subject to lower rates of interest as compared to other financing options such as personal loans, home loans, or other secured loans.
Fast loan processing: As car loans are offered against the car you wish to buy; it thus involves lenient eligibility criteria and minimal documentation. This enables lenders to process the loan faster.
No need to use your savings: With the availability of car loans, individuals are not required to shell out their savings or wait for long to buy their dream vehicle.
Flexibility to choose the tenure: Banks offer car loans for a tenure of up to a maximum of 7 years. So, you have the flexibility to choose the tenure as per your convenience.
No additional collateral required: You do not have to put any extra collateral while availing of a car loan. This is because your vehicle will act as a security with the bank and in case you fail to make the payment, the bank has the right to seize the vehicle and sell it off to recover the loan amount.
Flexibility to choose the payment mode: You have the flexibility to choose the mode of payment to repay your car loan. You can choose to pay through post-dated cheque or use the auto-debit facility where your equated monthly installments (EMIs) will be automatically deducted from your bank account. Make sure you do have sufficient balance in your account from which the money will be deducted.
Prepayment facility – In a car loan, you can also prepay your loan before the end of the tenure by using this facility. The terms and conditions may vary from one bank to another. Some car finance companies allow you to pre-close the loan only after completing a specific period. While some banks allow you prepay whenever you want. Charges may be applicable for prepaying your auto loan and varies for different lenders.
Availability of different repayment options: In a car loan, you get five different repayment options using which you can repay your loan i.e. regular EMI, step-up EMI, step-down EMI, special tie-up EMI, and Balloon EMI.
In nutshell, car loans have a lot of great features and advantages. Therefore, it is one of the most preferred routes for owning your dream four-wheeler instead of exhausting your long-time savings. However, thorough research is always recommended before opting for car loan.