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Considering a Car Loan for a Luxury Vehicle? 5 Important Things You Should Know
Posted on Thursday, October 7th, 2021 | By IndusInd Bank
Eyeing a stunning luxury vehicle that is a little out of your budget range? Worry not! Apply for a car loan, and drive away your chosen high-end vehicle in no time. Today, vehicle finance for luxury cars is more affordable than before, comes with flexible repayment tenures, and you can apply for one online. But, to avail of all these benefits, you need the right lending institution.
If you are looking for a luxury car loan for the first time, you must know a few things that will lead to responsible borrowing. Smoothen your loan process by giving these 5 factors a thought before availing a vehicle loan.
1. Interest rates
No big secret here! While zeroing in on a car loan, you must thoroughly research banks that provide the best possible interest rates to make repayment a breeze. But, don’t just pick a lending institution that offers the lowest possible rate of interest.
You must also review their repayment terms thoroughly. Perhaps they are extending a very low-interest rate only on an extra short EMI tenure or are asking for a hefty down payment in exchange. Besides, you can also align your luxury car purchase with the festive season, as lenders often extend discounted loan interest rates during those times.
2. CIBIL score
Your credit or CIBIL score is a rather important marker when applying for a vehicle loan. Even more so, when you’re seeking finance for a luxury car, as the total loan amount is relatively large! Therefore, make sure you have a healthy credit score before applying for the loan.
Remember, not only does a good CIBIL rating increase your chances for approval, but it also gets you a more favourable interest rate. If you presently have an average or low score, it is recommended to improve your CIBIL score by repaying your credit card bills on time. Also, make sure you don’t default on any ongoing loan EMIs.
3. Processing charges
Typically, lenders charge a percentage of the entire loan amount as their processing fee. Some lending institutions might charge a higher processing fee than others. Compare the processing charges, and opt for a lender that has the lowest fees. The logic here is simple! The lower your loan processing charges, the lower your total car loan amount.
4. Prepayment facility
Select a lender that allows you to prepay your loan without levying a heavy penalty. Loan prepayment simply means closing your loan earlier than its pre-fixed tenure. Doing this reduces your overall interest payment.
However, a bank often charges a fee when you prepay your luxury vehicle loan. So, before signing on the dotted line, make sure you check the prepayment charges and whether this facility is available to you.
5. Down payment
Know how much lump sum down payment you want to make, and take the loan accordingly. If you’re getting a car loan at very low interest rates, it’s ideal to safeguard your savings by making a smaller down payment.
However, if you aim to finish your loan quickly and possess a hefty disposable amount, make a generous down payment, and borrow a low loan amount. Either way, ensure that making a down payment does not hamper your lifestyle.
Final thoughts
Are you looking for luxury vehicle finance at competitive interest rates and negotiable repayment terms? If so, then apply for a car loan online with the IndusInd Bank. We ask only for minimal paperwork and offer relaxed eligibility criteria.
After approval, we quickly disburse your loan amount, so you can drive away in your new high-end car within a couple of days.
Visit our website to start your vehicle loan application today!
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
