Car loan scheme is a type of loan that a bank can give to a person. If a person has not enough money to buy a car then he can choose some other options. In these options the most important is the car loan. He can take a loan on the basics of which he can buy a car. Different banks offer this option to their customers in various ways. A customer can buy a car by paying a small amount of advance and he can pay the remaining amount later monthly or in other ways. If he buys the car by a car dealer then it would cost more then by taking a car loan from a bank. The car loan from a bank do not costs so much and this feature provides the customer a good facility.
Interest rates and related fees and their charges often vary a lot. You should make sure that you are taking the car loan from a bank and not from a car dealer. It is a time consuming task to compare the terms of loans and interest rates offered by different financial institutions. You have to only choose the one that you can repay comfortably.
You should understand about it more before applying for it:-
- All types of loans that are offered to you.
- All fees and interest rates, including insurance requirements.
- Interest dates and monthly repayments and,
- That total amount that you will have to pay at the end of loan period.
There are some important points that you should know before taking the car loan from any bank.
1. what will you need to budget for?
When you have got the car and you are happy by the price tags but that is not the complete price. The advertised price of the car is only at the beginning. You will also need to budget for other necessary expenses that will incur including the following:-
- Car registration
- Government stamp duty and transfer fees.
- The dealers delivery charges
- The number plate fee
But you should also manage enough money to cover all these expenses.
You should also have extra budget for some for expenses like extended warranty and mechanical inspection.
There are some factors for day to day running costs into your budget. This includes:-
It is additional to what you paid as car registration fee And it will also cover the damage that is caused to your car. It is a type of insurance and also keep in mind that this insurance can be costly to you and also consider it into your budget.
The fuels, regular services, spare parts etc are also maintained and they cost so much for the user to service and some cars need extra maintainance so also keep in mind the extra budget for it.
3. If you can not give back the payments:-
This is a strong rule for the car loan scheme that if you are not able to repay the loans within given time, the company has right not to give back the security fee that you payed and if the car itself is included in security as some companies has this rule then the company also can own the car and give back the money to the customer but these money does not include extra budget payed by the customer to the company and the customer faces a lot of loss.
In this case the customer should talk to the company about the problem instead of burying the head in the sand. The company can give some extension to the user but that can take some extra budget also and it is not so much then others.
4. The customer’s rights and responsibilities:-
Your responsibilities and rights must be told to you by the company providers under customer credit code. These include all the information such as fees, interests etc.in a written contract.
Their are several terms that are included in extra budget and they should be understood and clearly manged by the customer so that on the spot they should be posted thoroughly to the company. These include the registration fee, number plate fee, commission of agents and company, insurance fee, security fee, maintainance fee, vehicle transfer fee, and Some other fees also. So to manage all these budgets the customer should first take advice from the company agent or a good experienced person. This will be a good method to manage all these and the customer can also easily pay all the budgets at the spot.