With its scorching southern humidity, deafening traffic and scarcity of outstanding sights, the atmospheric capital of India has always been considered on the dreary side when compared to other metros of the country. Hugging the coast of Bay of Bengal, Chennai is home to a strapping populace of 6.9 million people. Real estate progression and traffic bedlam threaten to consume Chennai’s fascinating amalgam of Asian pace and spiritual grace. But the chaotic yet strangely synchronized growth of cosmopolitan charm never fails to refine the general standard of living. The city’s soaring economy owes aplenty to its well-established automobile business and hence the sobriquet ‘Indian Detroit’. Statistics show that Chennai had over 12 million 2 and 4-wheeled automobile registrations in 2008.
Chennai Car Loan Interest Rates
Chennai Car Loan Details
| Interest Rate (Monthly reducing balance) | 10.5% – 12.75% |
| Processing Fees | Rs. 500 to Rs, 5,000 |
| Loan Tenure | 1 year to 5 years |
| Pre-closure Charges | 2% to 4% on outstanding loan amount |
| Guarantor Requirement | No guarantor required |
Chennai Car Loan FAQs
Here are some frequently asked questions about Chennai car loans:
- How to apply for a car loan?Eligible applicants/potential buyers can apply for a car loan by visiting the nearest bank branch or downloading a car loan application form from the bank website. The duly-filled and signed car loan application form can be submitted to the bank along with the necessary identity, age, income, and address proofs. The bank will verify the details, process the application, and approve or reject it depending on the applicant’s car loan eligibility.
- How to check car loan eligibility?Most lenders have a car loan eligibility calculator on their websites. The eligibility of an applicant depends on his or her age, income, and credit score. Car loan eligibility criteria differ from lender to lender. Before applying for a car loan, check whether you are eligible for the loan so as to avoid rejection. Enter personal details such as age, income, and occupation into the eligibility calculator. The tool will check your eligibility and let you know the maximum loan you can get.
- What is the eligibility criteria for a car loan?The applicant can be a salaried or self-employed person, aged between 18 and 65 years, with a good credit score of 750 or above, have a steady income and a stable occupation with minimum 2 years of work experience in the same field. The applicant’s credit score represents the creditworthiness of the individual. The minimum monthly/annual income of the applicant represents his or her loan repayment capacity.
- How is a car loan repaid?Car loans are repaid through equated monthly installments (EMIs) wherein a fixed amount of money is paid each month to the lender over a specified period of time called the loan tenure. EMI consists of principal and interest.
- How to calculate car loan EMI?The free online car loan EMI calculator available on the lender’s website or a reliable third-party website can be used to carry out quick and accurate EMI calculations. The tool is simple and easy to use. Enter your proposed car loan details such as the loan amount, loan tenure, and interest rate into the tool. The results will consist of the principal amount, the interest, EMI, and the outstanding due after each EMI payment.
- What is the processing fee for a car loan?Lenders charge a small percentage of the principal loan amount as processing fee that is deducted upfront at the time of loan disbursal. Some lenders waive off the processing fee for existing customers or as a discount on special occasions for new customers.
- What is car loan prepayment?Lenders allow borrowers to prepay their car loans in part or full before the end of its tenure called prepayment/preclosure. Borrowers are granted such an allowance only after 6 to 12 successful EMI payments. Lenders levy a prepayment fee which is a percentage of the prepayment amount as a penalty for prepaying a part or the whole of the loan before the end of its tenure. The prepayment fee depends on the period of the loan tenure at which the prepayment is made.
- What is car loan foreclosure?A car loan can be repaid in full before the end of its tenure provided you have sufficient funds to do so. Lenders charge a foreclosure fee as penalty for pre-closing the loan before its time. Foreclosure is allowed only after 12 successful EMIs. Before foreclosing a car loan, make it a point to calculate if its beneficial to do so. Sometimes, car loan foreclosure can affect your credit score and even reduce your interest savings because of the foreclosure fee and other service charges.
- What happens if a borrower defaults on his or her car loan?If a borrower defaults on a car loan, then the lender can foreclose the loan by putting up the car (purchased using the car loan) for auction to make up for the outstanding dues. After repossession, the borrower is given the choice to bid for the car in auction if he or she can manage to get sufficient funds to do so.
- How to improve the chances of car loan approval?
- Ensure you meet the minimum net income requirement set by the lender.
- Improve your credit score. Maintain a credit score of 750 and above.
- Choose an affordable loan amount which is within your repayment capacity.
- Check your car loan eligibility before applying for one.
- Apply for a car loan with a bank that you are already banking with.
- Choose a make and model of car that is within your capacity to purchase.