Types of Car Loan in India
The economic boom in India has steadily changes the lifestyle and improved the living standard of Indian populace. Individuals are now earning better pay package which drives them to fulfill their dreams and buy anything they desire. This has eventually raised the demand of cars in India. Moreover, the car manufacturers in India have also started manufacturing cars catering to the needs and aspirations of different sections of the society. The Indian car market today is packed with cars from different price segments so that every individual can catch hold of his or her dream car.
When it comes to buying a car, car loan is the first thing that comes to mind. It has become an important part of owing a car as most of the car buyers make a small down payment and finance the rest of the amount be car loan providers in India. Car loan is offered by various lenders including nationalized banks, private banks, private financers, and loan providing agencies. Some of the known banks that offer car loan in India are State Bank of India, Union Bank of India, ICICI Banka, Axis Bank, Kotak Mahindra and HDFC Bank. Some of these banks not only help individuals own their desired car but also make a long term contract with them to ensure safety of their car by providing insurance for the car. Car insurance India also adds joy to the experience of car ownership in India.
In India, car loans are available to maximum 90% of the car value but then it mainly depends on the type of loan, employment nature of the buyer, and type of car model. There are many schemes for car finance but the most common types of car loan are as follows:
Car Loan with Fixed Interest Rates
Car loan with fixed interest rate is a kind of car loan where the interest rate does not change throughout the loan period. Even with this type of loan there are different banks that provide different interest rates and hence it is mandatory to compare car loan rates.
Car Loan with Variable Interest Rates
This is a type of car loan where the interest rate does not remain fixed and keep on changing during the loan period. The terms and conditions of the variable interest depend on the mutual agreement signed between the financer and loan receiver.
Car Loan with Adjustable Interest Rates
Car loan with adjustable interest rates is where the financier has to pay a lower interest rate for a certain time period and then at a later stage the interest rate is increased in accordance to the rate agreed between both the parties. This type of loan is a good option for those who don’t plan to stay in their loan for the entire duration.
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