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Types of Loans- Car Loans
Purchasing a car is no more a luxury. It has slowly become a necessity and a way of life. Thanks to car loans, any kind of car can be bought without putting a dent in a person’s financial planning. Car loans can be taken for buying both new and used vehicles. They are secured loans where the car itself remains as the collateral.
- The tenure of car loans typically ranges from 24 months to 60 months.
- Once qualified for a car loan, you can purchase a car immediately.
- To avail a car loan is quite easy since in most cases car dealers have tie-ups with specific banks.
- Car loans are given at a fixed rate of interest.
- Banks finance up to 100% of the vehicle’s on-road price. However, this is solely at the discretion of the bank.
Two-wheeler loans:
As the name suggests, 2-wheeler loans can be used to purchase 2-wheelers such as a bike or a scooter. While 2-wheelers itself does not cost much and can be financed by one directly, these loans help people manage their finances in a better way and therefore are becoming very popular. The interest rate is not very high and the loan amount can be used to purchase a new or used 2-wheeler.
The disbursement of the loan is solely dependent on the borrower’s loan repayment capability. The 2-wheeler itself remains the collateral with the bank and in case of a default, it is confiscated by the bank or NBFCs.
- The interest rates for 2-wheeler loans can be higher than auto loans.
- Most banks and NBFCs finance 95% - 100% of the 2-wheeler price.
- The tenure of 2-wheeler loans is usually up to 4 years. However, some banks and NBFCs may offer up to 5-years.
- Like auto loans, most 2-wheeler showrooms have tie-ups with banks or NBFCs. Hence obtaining a loan is quite easy.
