Top 6 myths on Car Loan: Busted

It is quite common to avail a new car loan in India. A car is necessary for your holiday trips with family and even for general commuting on an everyday basis. Many people these days apply for a car loan online. With decent car loan interest rate, it has become a preferred way to buy a car in the showroom too. Still, there exist multiple car loans in India myths. Through this article, you will discover these myths and bust them.

1. Poor Credit History Restrictions 

One of the biggest car loan eligibility myths is not being able to avail a car loan because of bad credit history. People tend to be afraid of rejection due to their less than perfect credit scores. The truth is that the people seeking car loans do not usually face rejection. The car loan interest rates India scene may vary along with the down payment, but there is actually a high chance of approval for your car loan.

2. No car loan on the old car

Even the car loan rates India scenario is quite vibrant, people tend to think that they cannot get financing for a second-hand car. Most people do not even indulge in some car loans compare activity for old cars. The truth of the matter is that it is possible to get a decent car loan for a second-hand car. The only caveat is that the used car should not be older than five years, for most loan providers.

3.  Applying for loan through dealer

There are better options to avail car loans than getting it via your car dealer. What entails when you get it through your dealer is that you will have to negotiate with your dealer and not the financial provider. This is not a good approach. The dealer will not make any extra effort to provide you with a deal that works in your favor. Make use of a car loan EMI calculator online, compare different financial providers and choose the one that suits your need.

4. Car loan only for one person

This is another misconception as even two people can apply for the same car loan. More than one person can be applicants for the same loan. You will have to ensure that you meet the other terms and conditions of the car loan.

5. 100% Financing

In most cases, 100% financing is not a possibility for car loans. Many car dealers have the practice of advertising full financing for car loans. Usually, though, a maximum of 90% of full car invoice is covered. Even then, you will have to pay a hefty interest rate. Even some banks offer a car loan of a maximum of around 85% of the total value of the car.  Yet, all of this is completely dependent on how good your credit score is.

6. Term relaxation

The terms in association with car loans are not completely rigid. There is always some room for flexibility. Speak to the car loan providers and come to a mutual agreement if you are not able to satisfy a condition. The authorities allow for some relaxation but you will understand this only after engaging the loan providers in discussions.

Do not be surprised if you believe any of the above myths about car loans. It is okay if you face confusion and believe in certain myths associated with financial services and products. Debunk these car loan myths in order to make a solid decision with your future car loan.