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| FAQ |
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• How do I approach Apex for a Car Loan? Click on Mail us & Call us
• How much loan can I get?
• What documents do I need to establish proof of income?
• How long does it take to process the loan?
• Is it necessary to have an account with the bank from which you take a loan?
• Do I need to give collateral to get a loan?
• Is credit profile important?
• What are the detailed components of my credit profile?
• What can I do if my credit profile does not match the banks requirements?
• Can I get auto loan without the submission of income documents?
• Can I increase the amount of loan that I can take and how?
• What is the extent of liability of a co-applicant and the guarantor?
• Can I reduce or change my EMI?
• How do I pay the Equated Monthly Installment (EMI)?
• How is the interest calculated?
• Floating rate of interest or a fixed rate of interest?
• What is Flat interest rate and Reducing Balance interest rate?
• How long can I get loan tenure for?
• Can I pay off my car loan before the tenure is up?
• Can I sell my car before I repay my loan?
• What happens if I delay some installments?
• What happens if my cheque bounces?
• What is a default?
• What happens after I have paid the last EMI?
• Can I get finance for insurance and registration?
• What happens if the car meets with an accident? |
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| How do I approach Apex for a Car Loan? |
| You can approach us in any of the following ways
By just mail us or Call us. |
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| How much loan can I get? |
The amount of the loan depends upon:
1. The cost of the vehicle.
2. The type (standard/premium).
3. The percentage financing offered.
If you are buying a new car, you can get up to 90% financing but some banks have a limit beyond which they do not offer loans. Also different banks have different terms for different models (standard/premium, new/old) The percentage of finance the banks give on cars is also determined on the basis of second-hand market value of that particular car. This is for cases, if default by any chance, the banks can get a higher resale value for the car. This makes the banks comfy enough to give higher percentage finance. |
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| What documents do I need to establish proof of income? |
| For income proof, most banks look at your IT returns for the last two years and also at the nature of income. However some banks do not consider speculative income - from the stock market, rental or agricultural income. Some banks discount such income by up to 50% in their workings. |
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| How long does it take to process the loan? |
| If all the required documents are in order, your process moves fast. You need to submit requisite documents like salary slip, tax returns, proof of residence, bank statements etc. The processing will take between 2 to 7 days. |
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| Is it necessary to have an account with the bank from which you take a loan? |
| There is no such compulsion for you to have an account with the bank. Normally banks have no problem in giving auto loans to people who do not have an account with them. However there may be certain privileges you may enjoy with having an account of the same bank you take a loan from. |
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| Do I need to give collateral to get a loan? |
| No, you don't need to give collateral. But you will have to hypothecate the car in the banks name and an endorsement made in the Registration Certificate (RC) book of the vehicle. |
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| Is credit profile important? |
| To banks, your credit profile is the most important factor they will consider before funding you. Your credit profile tells banks if one is able to and intend to pay back the loan. |
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| What are the detailed components of my credit profile? |
| The components of credit profile are age, profession/occupation, income/financials, previous credit history etc. |
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What can I do if my credit profile does not match the banks requirements?
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| If your credit profile does not match the banks requirement you can reinforce it by bringing in a co-applicant/guarantor who would be able to match the requirement. |
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| Can I get auto loan without the submission of income documents? |
| Yes you can, under the No Income Proof scheme offered by some banks. |
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| Can I increase the amount of loan that I can take and how? |
| Yes, you can. You can increase the amount of loan sanctioned by clubbing your spouse's income. The spouse then becomes the co-applicant. |
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| What is the extent of liability of a co-applicant and the guarantor? |
| A co-applicant has as much responsibility as the primary applicant and is equally liable to the banks from which the loan is taken. The guarantor however, promises to pay the bank in case the applicant(s) default on the payment. Both the co-applicant and the guarantor are liable for re-payment and the banks have the right to collect from either or them. |
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| Can I reduce or change my EMI? |
| Once you have signed the agreement with the loan provider, the EMI cannot be altered. So only after you are satisfied with the EMI agreed upon with the banks, sign the dotted lines. However you can pre-pay the loan amount in which case there will be some penalty. |
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| How do I pay the Equated Monthly Installment (EMI)? |
| Normally, all banks ask for a Post Dated Cheque (PDC) for the entire repayment period. |
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| How is the interest calculated? |
| The interest is usually calculated on a flat rate or on a reducing balance. |
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| Floating rate of interest or a fixed rate of interest? |
| A loan taken on floating rate of interest is a better option when the interest rates are falling, but when the interest rates are rising, opt for a fixed rate loan. Also if you go for a fixed rate loan, you will know in advance what your EMI's will be like and this will help you in your financial budgeting. If you choose a floating rate, you may not be able to budget properly. So do the math and choose wisely. |
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| What is Flat interest rate and Reducing Balance interest rate? |
| Suppose you have taken a loan of Rs.10 lac at 5% interest. You repay Rs.50,000 in the first installment. If the 5% interest continues to be applicable on Rs.10 lac after your first repayment, you are paying a Flat Interest Rate. But, if 5% interest is applicable now on Rs.9.50 lac, you are paying a Reduced Balance Interest Rate. |
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| How long can I get loan tenure for? |
| Usually auto loan tenure is available from 1 to 5 years.The tenure also depends on the type of car you wish to purchase. Also know that, higher the tenure, lower is the EMI. But the total interest outflow is higher. |
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| Can I pay off my car loan before the tenure is up? |
| Yes you can pay-off your car loan before the tenure is up by pre-paying your loan amount. But there may be certain rules regarding the pre-payment that your bank may have. Also you may have to pay a small penalty, normally, a percentage of the loan amount that remains outstanding. |
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| Can I sell my car before I repay my loan? |
| NO. You cannot sell the car unless you repay the loan. An NOC is required from the banks before you can sell the car. |
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| What happens if I delay some installments? |
| Delaying your installments frequently may affect your credit profile and might make further borrowing not only difficult but costly too. However, in some rare circumstances, if you delay an installment, most banks would charge you a delayed payment charge, as high as 3%, compounded monthly. |
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| What happens if my cheque bounces? |
| Dishonoring a cheque is a criminal offence. Legal actions may be initiated against you and your credit profile could be seriously damaged. |
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| What is a default? |
| Frequent prolonged delays and dishonored cheque are deemed to be defaults in repaying your loan. Most banks would expect you to turn in the asset on request, failing which they may seize your car, after serving you proper notice. |
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| What happens after I have paid the last EMI? |
| After the last payment is made, get the lien of the bank on your car cancelled. The bank will issue Form 35 with a covering letter (NOC) to the RTO for canceling their name from the R/C book. A similar NOC will also be issued to the insurance company requesting for the deletion of their name from the policy. |
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| Can I get finance for insurance and registration? |
| Most financiers do not cover Insurance and registration. The ex-showroom price is considered which does not cover insurance and registration charges. |
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| What happens if the car meets with an accident? |
| In the event of an accident, the first step is to inform the insurance company. The company then sends a surveyor to assess the extent of damages to the car. Your claim is then processed and paid directly to the banks, unless you have taken an NOC from the banks, in which case the payment will be made by the insurance company in your favor. The bank normally gives you an NOC if you are regular in your payments. In case of a complete loss, the bank would receive the payment directly from the insurance company. |
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