When taking auto loan, consider various charges; here're car loan options

Compare lenders on parameters like interest cost, prepayment and foreclosure charge before making a choice:

  • Check the loan amount you are eligible for with different financiers
  • Check the percentage of cost of car they will finance. Put down at least 20 per cent out of your own pocket
  • Check whether the 80 per cent or so that will be financed will be a percentage of the ex-showroom price or on-road price
  • Compare the interest rates of different lenders. The bank with which you have an existing relationship could offer you the best rate
  • Besides interest rate, compare other charges: processing fee, foreclosure charge, part-prepayment charge, and so on
  • Since many tend to prepay loans, go with a lender that levies lower  prepayment and foreclosure charge
  • Tenure can range from one-seven years. Longer tenure means lower EMI, but also means higher overall interest cost
  • Ensure that the sum total of all your EMIs does not exceed 35 per cent of your net salary 
  • After you have paid up the loan, the lender gives a no objection certificate that is valid for three months. Submit a copy to the insurer for change of name in insurance, and to the RTO to get a new registration certificate issued in your name