Unable to make car loan payments Find some useful tips

Our lives are uncertain and so are our bad times and good times. You can never say when you have to face an economic downfall. This will directly affect your loans and payments. Failing to make your car loan payments are one of such issues that you may face in this situation. Whatever your financial circumstances are, if you don’t have the money to pay for your car loans, you should address it to your lender. They’ll help you to make a budget that you can afford as a monthly payment. 

There are measures than you can take to meet your monthly payments amidst the financial disaster. Lenders don’t want to take away your vehicle because it involves lots of complicated processes and money. Instead, they can make short and long term plans for you that’ll help you to stay right on your current payments and will be beneficial for them too.

Let us show you how you can plan car loan payments:

Refinancing options: 

This is a convenient option where you can take another loan to repay your current car loan. If your credit score is good until now then you may get the loan on a lower interest rate. For instance, if you have 48 months left on your loan, you may refinance over 72 months. This may increase the interest rate, but if you calculate properly then you can end up with lower payments. 

Co-operating with your lender: 

What you can do best to avoid being late for payments is to talk to your lender about your situation. Address the issue that you are having and find a solution while talking to him. Calculate when your next payment is due and if there is anything that you can afford to do. Some lenders may allow you to skip one or two payments for some charges. This may add some more amount to your principal loan amount. However, it will buy you some time to go for a long-term plan. 

Selling off your vehicle: 

If you know that your financial condition is not going to improve any soon, then it is better for you to sell the car. You may get 15% to 25% more than the trade-in value. In this way, you can have enough money to pay for the loan. If your situation looks a bit good and temporarily bad to you, then you may refinance and keep your vehicle. 

Car loan transfer: 

This is one of the best options that you can take. If your car is in good condition and if you can find a buyer then you can transfer the car ownership and the loan amount to the buyer. Contact your lender or the person that you have borrowed from, to get contacts who are interested to buy the car. After changing the registration, you’ll be free from the loan amount. 

Proper and meticulous planning can help you to get throw your financial crisis. However, you may still find yourself in a tricky situation in spite of opting for all the measures. We hope that a little luck and following these tips will save you for the day. 

 

How To Transfer A Car Loan To Another Person

Car buying experience may be one of the most awaited moments in the life of an individual. But as we proceed towards reality, there may be an end number of reasons that may convince people to quit or transfer the car loan into another’s person’s shoulder. Well, there is nothing new in it! If you are planning to transfer your car loan, then let’s talk frankly! There are some provisions to transfer your loan from you to another’s account. Yet, according to the rules, it is possible, but in reality, you have to cross certain stipulations to transfer a car loan.

 

 Benefits of transferring car loan

 

Arguably people ask the question – why to transfer the car loan. But if we consider the viewpoint of the investment we must say that, anything that proffers us benefits, we must pursue it. Perhaps, you have very little knowledge about the plus points of transferring the car loan. Consequently, we are articulating some of them:

 

  • You can get rid of the old  model vehicle
  • In the period of crisis, you may be able to avoid the strong banking penalties
  • You earn more than that you deserve car loan
  • You get instant cash flow in your hand.

 

The concept of transferring the car loan

 

Basically there are two types of ways through which one can transfer the balance of a loan from one person to another person. The first way of transferring the car loan is that you must have to declare in front of your lender that you have already found a new debtor who will pay the loan on behalf of you. Following the first one, the second car financing option is that you have to seek the help of your financer in order to mitigate the burden of car loans. On behalf of you, a financer, supported by your lender will pay your debt. In this scenario, the bank searches this person to replace you as a debtor.

 

What are the effects of transferring the loan amount?

 

In the above, we have discussed the legal proceedings of transferring car loans. It is very important to keep the knowledge with you, because if you are unaware of the legal proceeding then you will face problems while you will complete the manual proceeding. When you introduce your new car loan debtor to a lender, then your lender may charge less penalty, but they will very crucially inspect the financial health of your buyer. On the contrary, if the bank provides the support of the debtor, who will pay your installments on behalf of you, then they may charge more penalty and lessen your credit score. Even in some cases, they can make you the debt defaulter.

 

The manual process of transferring the car loan

 

  • First, inform your lender that you want to discontinue your car loan
  •  Secondly, find a borrower who may agree to take over your loan
  • In the next step, read the loan agreement very carefully
  • After that, submit yours as well as the new debtor’s documents 
  • In the last step clear all the fees charged by the lender.

 

‘The burden lies in the mind of the beholder’’-If you are feeling that the car loan is unnecessary and irrelevant in your life, then, of course, you should quit it. Lastly, we may advise you that act smartly while paying the debt.

All You Need to Know before taking a car loan

taking a car loan

Buying a personal car is every body’s dream and makes your home feel complete. Using a vehicle is perhaps the greatest purchase you will make, second just to purchasing a home. While paying money would be perfect, actually, a great many people need credit to pay for their vehicles. Regardless of whether it is new or utilized for the loan. As something that collects enthusiasm as you, take care of after some time. Moreover, it is essential to come arranged before taking out a vehicle advance. These are few things you should know before taking a car loan.

 

Knowing the right credit sources 

 

Your credit source rating is the absolute most significant factor in figuring out what sort of advance. Moreover, you will have the option to get from a bank. Regardless of whether you are experiencing a bank, a car credit seller or the business itself, the rate will be subject to it. Note that not all moneylenders use. In addition, to take a gander at, a similar scoring framework. Various banks have various criteria so the base score expected to qualify will contingent upon which organization is giving the financing. 

 

Applying for loan during two weeks’ time span

 

Your financial assessment will marginally diminish when moneylenders check your record of loan repayment. However, keeping your application procedure inside a 2-week time span decreases the negative effect. As per credit specialists at Automobile or car loan. Loan a mystery most banks will not let you know. The FICO scoring shopping period is 14 days so all requests made during that time will be considered as one. Moreover, it will diminish the hit on the score of your car loan.  

 

Get pre-approved your car loan

 

It is in every case best to stroll into the car dealership. The dealer with a financing offer from a bank or moneylender in your grasp. A pre-endorsed offer ensures that you have an advance to take care of the expense of the vehicle you need. All the more critically, it likewise gives you extra influence. With your loan, the expert confirmed unlimited free pass or coupon close by, you changed into a money purchaser. At the car, loan and you are in a lot more grounded arranging position for the loan

Calculating the cost  

 

Before you decide on getting your car loan down to a particular sum. It is critical to comprehend the variables that go into setting your vehicle installment. The APR just affects the sum you pay every month. The more significant components incorporate the absolute credit sum you need, regardless of whether you have an initial installment. The amount you are putting down and the advance term (the reimbursement time). Utilize a vehicle advance-adding machine to play with the numbers. You might be in a rush to drive that vehicle off the part. However, taking a day to run the numbers can spare you thousands over the long haul.

 

Understanding the dealership financing

 

Occasionally vendor financing can have all the earmarks of being an increasingly alluring offer. Arrangements like 0% financing and huge money back discounts, which can eventually lessen the aggregate sum of your advance. It may seem like the best choice. Recall that most financing choices are just accessible to the most noteworthy qualified purchasers. On the off chance that you have anything negative on your credit report, a low FICO score. Moreover, it will restrict credit understanding; you will probably not meet all requirements for these specials.

 

Financing your new car is an extraordinary method to get the vehicle that you need and need without giving up. The procedure can be confused so remember these tips before saying yes to anything. At the point when you do your exploration, are pre-affirmed, and show the math to yourself. Moreover, you will leave liking the vehicle and your money related circumstance.

Refinancing a Car Loan

Refinancing a car loan refers to taking on a new or used car loan in order to pay off the balance of your existing car loans. Most of these loans are actually secured by a car. And paid off in fixed monthly payments over a predetermined period of time. This predetermined period of time is usually a few years.

The reason why people generally refinancing a car loan is basically for saving money. This is because this refinancing could score you a lower used car rate of interest. As a result, it can actually decrease the monthly payments and free up cash for other financial obligations.

Even if you are unable to find a more favorable rate, you may be able to find another loan with a longer repayment period.  Therefore, this might also reduce your monthly cost, although it might increase the total cost of interest over the life of the loan.

When should you hold off on refinancing?

Refinancing loans can actually save you money. But, it is not always the best option. You may also want to hold off on refinancing if any of these following applies to you:

You’ve already paid off most of your original loan.

Interest is often front-loaded. This means that you pay more of it off at the beginning. The longer you wait to refinance, the lesser you are able to save on interest.

Your car is old or has a significant amount of miles on it.

Cars tend to depreciate quickly. So, you will likely be able to refinance car loan within the first few years of owning a car. Some lenders for an instance may not refinance cars that are older than seven years or have more than 75,000 miles on them.

The fees outweigh the benefits.

It is important to look out for any fees associated with refinancing. For instance, there may be prepayment penalties for paying off your original loan with your refinance loan. You may have to pay some extra interests in addition to the principal amount.

APPLICABLE INTEREST RATES FOR USED CAR LOAN :

Used car loans are basically the loan that you take for purchasing a second hand or a pre-owned car. Generally, the maximum tenure of the loan for the used vehicles may range from 10.50% and 8.9 for the floating rates. In addition, the maximum loan tenure for pre-owned may range up to 5 years. Here we will talk about the interest rates for used car loan. You can avail a used car loan at either a floating and fixed interest rate. Therefore you can make use of exciting offers by applying for a used car loan through various banks.

Down below, the interest rates for Used Car Loan in India are:

HDFC Bank

Fixed – 13.00%

Rs.2,275 for a tenure of 5 years

80% of total market value

SBI Car Loan

Floating – 12.60%

Rs.1,798 for a tenure of 7 years

85% of the total on-road price

Kotak Bank

Fixed – 17.00%

Rs.2,485 for a tenure of 5 years

90% of the total market value

ICICI Bank

Fixed – 10.50%

Rs.2,149 for a tenure of 5 years

80% of the total market value

Union Bank of India

Floating – 11.85%

Rs.2,217 for a tenure of 5 years

50% of the total market value

Punjab National Bank

Floating – 11.20%

Rs.2,184 for a tenure of 5 years

70% of the total market value

Central Bank of India

Floating – 9.95%

Rs.2,122 for a tenure of 5 years

75% of the total market value

 

There are some factors that affect loan interest in India:

 

  • Credit history– In case of determining your loan interest, Credit history plays an integral role in the used car finance. Thus,  it is always advisable to have a credit score of 750 and above in order to receive a lower interest rate.
  • Level of income– A lower amount of debt-to-income ratio is typically appropriate while availing of a used car finance in India.  Therefore, this means that the lender will not falter in the EMI payments and also he will not delay the same since he or she has a steady source of income with fewer debts.
  • Loan tenure–It is a known fact that longer the loan tenure, lower will be the rate of interest. Therefore, you should opt for a tenure that is best suitable to your financial condition.

In order to apply for a used car loan, you need to have the following documents:

Identity Proof

For Salaried individuals: Identity Proof such as PAN, Passport, Aadhar, Card, Voter Id and an Employee Id issued by the Government of India.

Self-employed: If you are a self-employed individual, you must have your Passport, PAN Card, Driving License and Sales Tax Registration Certificate

Address Proof

Passport, Telephone bill, Lease Agreement, Utility Bill and Bank Statement. Address Proof requirement for salaried and self-employed buyers are the same.

Income Proof

For the Salaried Class: Latest 3 to 6-month salary slip and form 16 / IT return

For the self-employed: Income Tax returns for the past 2 years. You will need it with the Balance sheet as well as P & L A/C, computation of income. If the ITR is audited than the audited report along with the annexures are also required

The document is indicative and the sales representative will provide further details upon the meeting.

WHAT IS USED CAR LOAN & Eligibility Criteria For it

A used car loan is the type of loan that you take to buy a used or a second-hand car. These type car loans enable you to get a loan for buying a pre-owned or a used car at relatively lower interest rates. There are many banks out there who are quite great players in the pre-owned car loan. Some banks, also provide up to 100% finance for the used cars, with easy, simple and hassle-free processing, the instant disbursal and minimum documentation.

In the case of a used car loan, the cost of a used car will be much lower than that of a new car. It means that the cost of insurance will also decrease. In addition to this, in a used car loan, the borrowing amount will be lower and the terms of repayment will be flexible. You can have a tenure of around 60 months for the repayment of the loan. 

Before applying for any loan, you first need to accomplish some sets of eligibility criteria. 

Salaried Individuals:

  • This category may include the doctors, CAs, or the employees of various private limited companies, employees from different public sector undertakings, including central, state and also the local bodies
  • For applying for a used car loan, you need to be an individual minimum of 21 years of age at the time of applying for the loan, and certainly not older than 60 at the end of the loan tenure.
  • Also, you need to have a job for at least 2 years, with a minimum of 1 year with the current employer. 
  • If you earn a minimum of Rs. 2,50,000 per year, including the income of the spouse, you are eligible for the loan.

Self Employed Individuals (Sole Proprietorship):

  • This category of eligible applicants of used car loans includes self-employed sole proprietors in the business of manufacturing, services or trades.
  • In this case, you need to be an employee of 25 years of age at the time of your application for the loan, and no older than 65 years at the end of the loan tenure
  • You have to be in business for a minimum of 3 years
  • Also, You should earn at least Rs. 2,50,000 per annum

Self Employed Individuals (Partnership Firms):

  • This category includes the self-employed partners in the business of manufacturing, trading or services
  • Here also, who have to earn at least Rs. 2,50,000 per annum
  • In addition, you need to have a minimum turnover of Rs. 4,50,000 per annum
  • You also need to have a residence or office telephone line. A post-paid mobile phone which is a minimum of three months old is acceptable if only one landline is available.

Self Employed Individuals (Private Limited Companies):

  • This includes those who own a private company in the business of manufacturing, trading or services
  • They should earn a minimum amount of Rs. 2,50,000 per annum
  • In addition, these individuals also need to have an office landline

Self Employed Individuals (Public Limited Companies):

  • This group of eligible applicants includes the directors in public limited companies that are in the business of manufacturing, trading or services
  • This applicant should earn at least Rs. 2,50,000 per annum.
  • Also, these individuals who have an office landline.

Self Employed Individuals (Hindu Undivided Family – HUF):

  • This includes the self-employed individuals in a business who falls under HUF
  • This individual must earn at least Rs. 2,50,000 per annum
  • Individuals also must have a residence and office telephone line. A post-paid mobile phone that is a minimum of three months old will be acceptable if only one landline is available
  • The Karta should be the co-applicant in the individual capacity.

STEPS TO GET A CAR LOAN APPROVAL EASILY:

It goes without saying that, when it is time for you to buy a new car, you put in a lot of research into buying the car. You choose that’s just right for you and your family. But, do you really end up taking the first loan your dealer offers you? All of us want a car loan to make our car ownership enjoyable and hassle-free, and try to avoid feeling burdened by the premiums. So, how do you get a good car loan? Here are a few tips you should keep in mind before choosing your car loan company and how you can get a car loan approval easily.

5 tips on how to get the best car loan and how to make it easy for you to avail the loan:
  • Find the right deal:


It is important that you buy a car from a dealer who has a relationship with a bank.  These dealers can offer you the best car finance. Make sure that you understand all the costs and charges. Specifically check about processing fees, prepayment charges, and type of interest. Also, you can research and compare cars and seamlessly apply for a highly competitive loan.

  • Approach your existing banker:

Having a pre-existing relationship with your banker or car finance company is effective in saving time and money and lessens the complications and hassle of the process. Various Banks out there offers its existing customers many benefits with its car loans, including a loan in 10 seconds via Net Banking, zero documentation, and amazing rates.

  • Check your car loans eligibility


Most banks out there have different eligibility criteria when it comes to new or used cars. So, if you are buying a pre-owned car, make sure that your bank will finance it. In addition, different banks will have additional criteria to evaluate the eligibility of a car for a loan depending on its age, model and condition.

  • Ensure you have a good credit score

Before you apply for a car loan in India, you need to make sure you have a good credit score. If you are a credit-worthy customer, you will be able to get higher loan amounts, faster, and at better rates.

BENEFITS OF CAR LOAN & HOW TO GET YOUR CAR LOAN EASILY

Basically, a car loan is a type of loan that allows a buyer to pay for the car through monthly installments rather than making a payment at one time. Basically, the buyer has to pay part of the price as down payment and the lender will finance the rest. Now let’s talk about the benefits of car loan.

Various important Benefits of car loan:

  • Makes easy to buy a car: – As many banks provide up to cent percent finance on ex-showroom price, you do not at all have to wait long to buy your new car.
  • Flexibility to choose the tenure: – Banks offer car loans for the tenure of up to 7 years. You have the flexibility to choose the tenure as per your convenience.
  • Loan for buying a used car: – Many banks out there offer used car loans these days. Although the car loan interest rates will be higher than the interest rate on new car loans and the loan-to-value ratio will be relatively lower than the new car loan.
  • Interest rates are negotiable: – Unlike some home loans, in case of a car loan you have the flexibility to negotiate the interest rates with your lender if you have a good credit score and have a good relationship with the banks.
  • No collateral is necessary: – You do not have to put any collateral for availing the car loan as your vehicle will act as a security with the bank. In case of a failure to pay the premiums or the amount of the loan, you will first be sent a notice to pay the pending amount, and after repeated failure, a defaulter status gives the right to the bank or financing company to seize your vehicle.
  • Flexibility to choose the payment mode:– You can also choose to pay through post-dated cheques or use the auto-debit facility.
  • Suitable interest rate option: – The rates of interest on a car loan depend on the type of loan you opt for. Fixed interest rates and floating interest rates are the variants available for you to choose from. 

For easy sanctioning of car loan, you need to have the following documents:

Car Refinance Loan is a type of secured loan. Here, you can pledge the papers of your car with the lender in order to get the car finance. Also, there is no restriction on the end-use of funds in case of a car refinance loan. Also, the paperwork will be extensive.

  • A Duly filled application form
  • Photographs
  • Know your customer documents – any one identity proof. (Voter Id, passport, ration card).
  • Address proof. (electricity bill, phone bill, passport)
  • Income proof or latest salary slip
  • Also, At times bank may ask for employment stability proof

Factors that impact your car loan interest rates:

  • First of all, it will depend on your credit score. You can negotiate with the lender for a lower interest rate if you have a high credit score.
  • The tenure of the car loan will decide your total interest outgo as well as the interest rate.
  • Car age and the model of the car will also decide the car loan interest rates.