The Many Facets of Vehicle Loans and How to Maximise their Potentials

Today, buying a car of your dreams is a much accessible option as compared to the earlier times. A financial institution provides car loans that are secured against the ownership of the vehicle. It is considered comparatively easier to avail a vehicle loan, where the lender pays the maximum amount of the car value and the borrower is required only to pay the downpayment. Such loans broaden the options available to the borrowers and help them in purchasing a better car that otherwise might have been too expensive to buy.

Let’s have a look at some of the many facets of vehicle loans:

1. Advantages compared to leasing: With each monthly payment, you make your way towards eventually owning the vehicle. In lease agreements, this is not the case. There, you have the option to buy the vehicle or return it to the dealer at the end of the contract. However, in the case of vehicle loans, when the debt is paid off – you own a piece of property. They also don’t limit the number of miles you are allowed to drive before incurring costly charges, as is the case with lease agreements.
   
   
2. Customized EMI: The borrower has the advantage of customizing the EMI as per his requirements and repayment capabilities. Remember that if you hold an excellent credit score (Ideally, above 750), you hold power to negotiate interest rates with the lenders and get your say. You can also conveniently cut down the EMI that you are entitled to pay over the tenure of the loan.
   
   
3. The advantage in 2 wheeler loans: As per the Indian Motor Act, two wheeler loans have to be sanctioned including the insurance and accidental coverage. Furthermore, most loans also come with the coverage of extra costs such as accessories and registration. Similar is the case with car loans, where banks and NBFCs are willing to pay 95% of the car on road price, which includes registration, insurance, and accessories. Thus, people with fewer funds can also enjoy owning their dream car.
   
   
4. Early pay-off: Auto loans that do not charge penalties for an early pay-off give you the opportunity to end the credit agreement ahead of schedule, leading to money saved on interest. By showing that you can manage to pay your debts timely or even before, you can improve your credit score significantly and hence, make it easier to secure loans in the future. Another advantage you can avail is by paying off the auto loan with money from another type of loan, like a home equity line of credit. The company would require you to carry a particular amount of insurance coverage for the tenure of the loan. You can conveniently reduce this insurance coverage by paying off the loan sooner and make adjustments to the policy to your best-suited terms.
   
   
5. Hassle-free process: The loan procedure has become more efficient through the constant improvements and developments in policies relating to vehicle loans. Generally, the documentation and approval process for vehicle loans takes less than a day and, in many cases, on the spot approval has also been made possible. With the widespread competition among the financers, it has led to the borrower’s advantage regarding maximum coverage and great offers in the market. Provided you fulfill the basic eligibility criteria, you can avail a car loan or two wheeler finance conveniently.   

There has been a growing trend among people to upgrade their cars continually and selling them after a point of time. Due to this reason, many people don’t hesitate in buying these cars, which are also backed by great used car loans. Clix Capital is a digital NBFC that provides such loans for anyone who fits the  basic eligibility to avail:

• Over 18 years of age, while applying for the loan and under 65 years, at the end of its tenure
• A salaried employee or a self-employed individual, with at least one year of professional experience
• Earning a minimum gross income of Rs 20,000 per month