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Everything you need to know about car loans

August 16, 2017

Everything you need to know about car loans

A car loan can be defined as a type of a personal loan that is used to purchase an automobile. Here is what you need to know before you get a car loan:

Interest rates: The first thing you must do before applying for a car loan is to check the interest rates provided by various banks and financial institutions. There is no standard rate of interest and even fluctuation by a little margin can be beneficial to the customer.

Credit score: Having a good credit score is a must, to obtain a car loan. Low credit score will affect the chances of your request being denied. In the period before attaining the loan, one must keep a tab on their credit score. If your credit score is not satisfactory, it would not be too late to try and improve it.

EMI: Considering that the loan will usually be paid through this option, it is always a good idea to calculate the value of the EMI while getting a car loan. This way you will be aware of the amount of money you will have to spend every month to repay your loan. The EMI value will also give you an estimate of the number of months that you will be paying off the loan for.

Service tax: Service tax is something you as a customer are not allowed to complain about. It is always better to enquire about the service tax in advance to know how much needs to be paid. Many banks charge the tax in a small amount on a monthly basis, where as other banks charge a lump sum over the period of a year.

Schemes and offers: It is always better to have knowledge of the schemes and offers provided by the bank. This is one way to save some money and avail a right car loan at the same time. If the schemes work in your favor, you may even get a customized loan.

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