Buying a car of your own is a ‘dream come true’! When you are young, owning your first car can be identified as a symbol of success. However, purchasing a vehicle is not a cheap affair. If you have just started working then you probably do not have enough savings to afford a car. This is where a car loan comes in. The loan can help you with the finance at the time of purchase and you can repay the money over a long period of time.
In India, the loan for a vehicle comes in different basic types as listed below.
1. New car loan
This loan option is available for people who want to buy a brand new car. The loan can be taken to buy any car model from any maker. You will have to pay an interest of 9-14% per year over a period of one-seven years.
The truth is that not everyone can afford to buy a new car, even with a loan. The good news is that you can always purchase a used car with the help of a used car loan. Most lenders will finance up to 85% of the car’s price. You will need to pay a yearly interest of 12-18%. You will have one-five years to complete the repayment. However, to get a loan for the previously owned car, the vehicle has to be less than five years, and, at the time of the loan’s maturity, the car cannot be more than ten years old.
A business organization or an individual, who owns a business that requires cars, can opt for a commercial vehicle loan. This kind of loan comes with a 10-15% interest rate that you will have to pay yearly over a period of six months to five years. The amount of loan you can get depends on your business’ yearly turnover and the number of cars you already own.
4. Two-wheeler loan
Not everyone wants to buy a four-wheeler; some people love a bike more than a car. If you are a bike enthusiast then the two-wheeler loan will help you get one. The loan for two-wheelers comes with a yearly interest rate of 11-18% on the amount paid for the bike. You have to be at least 18 years of age to avail of the loan. However, some lenders require a minimum age of 21 years.
5. Tractor loan
The tractor loan is available for people or organizations, which have a regular source of income from any agricultural activity. It is also available for people who want to rent tractors as a business. The tractor loan is available for a yearly interest of 12 % on the loan amount. You have to pay a monthly interest for five years to complete the payment.
When applying for a loan to buy any kind of vehicle, be careful about which lender you choose. Spend some time comparing your available options before settling for one.