Check the benefits and privileges of getting an automobile Loan
Owning an automobile is quite convenient for daily conveyance to different destinations. You need to travel around every day for various purposes such as dropping your kids to school or going to office. However, as the cost of automobiles is getting higher ‘n’ higher every year, not everyone can afford to own a vehicle. And, to take care of the conveyance requirement, several banks and financial institutions have come up with their automobile loan facilities.
Benefits of automobile loan (car loan/ bike loan):
· Makes big ticket purchase easy – Today the cost of an average range starts from Rs.70000 to goes above Rs.1 lakh. So, evidently, it is not easy to shell out this big amount from the savings all at once. This is when bike loan helps you make big purchase at ease without shelling out lump sum money. Similarly, car loan also helps to buy your dream car without concerning over the monetary budget.
· Flexibility of tenure – Generally, banks and financial lenders offer flexibility to choose the loan tenure starting from 18 months to 7 years. Borrowers can choose the tenure as per their convenience and financial budget. This way borrower doesn’t feel the burden to repay higher EMIs and hampering their other everyday expenses.
· Affordable rate of interest – Due to the increasing demand for automobile loans, most of banks and financial institutions offer competitive rate of interest on automobile loan to gain the borrower. This benefit is extended to the potential borrowers who are looking for a car loan or bike loan.
· No collateral required – When you apply for an automobile loan, you don’t have to additionally provide any collateral against the loan. Because the vehicle itself is treated as the collateral against the loan, so that in case you fail to repay the loan, lender has got the legal rights to repossess the asset (vehicle).
Factors that impact your automobile loan eligibility:
· Credit Score – The very first factor that lenders check before approving or sanctioning car loan/ bike loan is checking the applicant’s credit score. It is the most important condition that the applicant needs to fulfill to get the car loan approval quickly. However, every bank has a different credit score criteria to approve the automobile loan.
· Employment status – Lenders want to be every bit sure that they will receive the loan amount in full and on time, and thus, check every aspect of a borrower to judge their creditworthiness. Most of the banks check borrower’s employment status to evaluate the degree of credit risk. Borrowers usually need to have stable work experience for at least 2 to 3 years and must be working in the same organization for the last 6 months.
· Outstanding debt – Another factor that determines your eligibility for car loan or bike loan is the borrower’s outstanding debt. This helps lenders to figure out whether the borrower can afford to pay another loan EMI or need to first pay off the outstanding dues.