Today, the whole world almost lives online. From communicating with friends and family to shopping for groceries, paying bills, doing research, etc., the internet has become the platform for a whole new way of living.
It then comes as no surprise that people are looking to online platforms to not only research cars before they make a purchase, but also to apply for car loans.
With most banks having an online presence, the process of applying for a loan has now been streamlined to be faster and easier than ever before.
While you can still go ahead and apply for a car loan offline, online applications have a whole host of benefits which are well worth looking into.
What are the benefits of applying online?
Let’s take a look at some of these benefits:
Compare interest rates faster
You don’t have to trudge in and out of banks looking for information anymore when it’s all available online. There are several websites that act as rate aggregators, giving you all the information that you need at a glance.
They also give you valuable data that will help you make more informed decisions, such as eligibility criteria, documents required, taxes, fees, etc.
This also helps you get a bird’s eye view of which bank offers the lowest rates, which one has no penalty for foreclosures, which one has the longest repayment tenure, which one provides the maximum loan amount, etc.
Once you have all the information at your fingertips, all that remains is to put in the application for the car loan.
Calculate EMI payments
Banks, as well as aggregator websites, offer free calculators to determine how much EMI you will be paying over a period of time, how much the interest will be, the processing fees, etc., over a specific repayment tenure.
This helps to give a clearer picture of what you can afford and how much of a loan amount you should apply for.
This makes for better budgeting and financial management. In the long term, this will ensure that you don’t default on your loan repayments since you have only taken the amount that you will be able to comfortably pay back in time.
Lower interest rates
It is common knowledge that you can get loans both online and offline. This can be through banks, non-banking financial institutions, auto finance companies, credit unions, and even car dealerships.
You will also get very competitive interest rates from these places. Online lending platforms often offer even lower interest rates than offline platforms because of the higher awareness of different loans and their features among online users.
The greater competition among lenders and higher awareness among consumers is something that works to your advantage when applying for a car loan online.
Faster disbursal of loans
Online applications of car loans almost always result in faster approvals and disbursals. This means you are not kept waiting in suspense for days to know if your loan has been approved or not.
Depending on the online lender, you will get to know anywhere from within a few minutes to a few hours whether your loan application has been approved or not.
Either way, it will save you valuable time so that you can either continue with the loan application or pursue other options with other lenders, as the case may be.
Tracking made easier
Once you have put in your application for a car loan, you can easily track your application online without having to call up the bank’s office or customer care center.
No extra charges
Online lenders do not charge anything extra for the online features, other than the usual processing fee.
Whether it is for the online calculator or for the comparison feature, online lenders offer these value-added and informative services completely free of charge.
Since it is more cost-effective for the lender, some of these benefits are passed onto the customer as well.
Finally, there is an important element of convenience in applying for a car loan online.
From researching the various car loan options to getting the lowest interest rates and finally getting to know of approval within minutes, the online world makes it far easier and faster to shop for a car loan from the convenience of your phone or laptop, wherever you may be.
You no longer need to spend your precious time running from pillar to post for a car loan application.
What are the eligibility criteria for car loans?
We checked across three leading banks in India for car loan eligibility – Axis Bank, HDFC Bank, and SBI Bank.
Here are some of the common factors:
- Minimum age is 21 years across the banks. The maximum age ranges from 60 to 70 years of age, depending on the bank.
- Salaried individuals, self-employed individuals, and individuals in the agricultural and allied sectors are eligible.
- Salaried individuals must have a minimum of 1 year of continuous employment (with the same employer).
- The minimum net annual salary ranges from Rs.1,80,000 (for self-employed individuals and for select models of cars) to Rs.2,40,000 for car models that are approved.
- Income eligibility may be based on the latest salary slip and Form 16 (for salaried individuals) or the latest income tax returns for self-employed individuals.
To know more about Car eligibility criteria www.bankbazaar.com
What are the interest rates on car loans offered by leading banks?
We checked the interest rate for car loans among 3 banks in India – HDFC Bank, Axis Bank, and SBI Bank, and this is what we found:
HDFC Bank: The rate of interest ranges from 9.25% to 10.25% p.a., which is dependent on the segment of the vehicle.
Axis Bank: The rate of interest is between 9.25% to 11.50%p.a.
SBI Bank: The rate of interest ranges from 9.30% to 9.80% p.a.
Car Discount Schemes
Another way you can maximize the value of your car loan is by choosing one of the many discount schemes offered by leading car manufacturers.
Given below are some of the limited period offers that provide good value for money:
Renault: Renault offers up to Rs.1.5 lakh discount benefits on the Lodgy and between Rs.1.2 lakh and Rs.1.7 lakh cash benefits on the Captur.
Volkswagen: Volkswagen is offering attractive discount offers, corporate offers, and exchange bonuses on its models ranging from the Polo to the Ameo and Vento. These range in amounts from Rs.20,000 to Rs.60,000.
Ford: Ford is offering discounts on the Freestyle, Aspire, Ecosport, and Endeavour. There are discount offers, corporate discounts, and exchange bonuses that range from Rs.15,000 to Rs.25,000.
Hyundai: Hyundai’s discounts are being offered on the Grand i10, Xcent, Elite i20, and i20 Active. There are cash discounts (from Rs.20,000 to Rs.60,000) and exchanges ranging from Rs.20,000 to Rs.45,000.
Tata Motors: Discounts are being offered on the Tiago, Tigor, Nexon, and Hexa. These range from Rs.10,000 to Rs.20,000. Exchange bonuses range from Rs.10,000 to Rs.15,000.
It is best to visit the respective car dealerships to find out more about these offers and get more dealer-specific offers as well.
Applying for a car loan online has all these benefits which make it well worth your time. With just a click of your mouse or a tap of your fingers, your car loan application is well on its way to making your dream car a reality much faster than you think.
Keep in mind to not only look for lower interest rates and longer repayment tenures (according to your requirement) but also to apply for loans from only reputed and trustworthy lenders.