One can avail of the advance EMI schemes, deposit payment schemes or margin money schemes. The size of the loan usually depends on the type of the vehicle (standard or premium), the percentage of financing and the cost of the vehicle.
A loan of up to 90% of the total cost of the car can be availed in case of a new car. To be on the safe side, some of the finance agencies set a limit beyond which they do not offer any loans and most of them come with different terms and conditions for different models. For example, Maruti 800, for having a high resale value always comes with a higher percentage of finance provided by the financing company because in case the buyer defaults, the financing company can get a higher resale value of the car.
Interestingly, there is no need of any collateral to avail a car loan. The procedure involves the bank or finance company hypothecating the vehicle in its name. In the Registration Certificate (RC) book, the endorsement of the
Normally the tenure of repayment of the auto loan varies from 1 to 5 years. However, there are some banks which offer a flexible repayment option of up to 7 years.
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