Fixed Deposit Can Avail a Car Loan for You
The history of Fixed deposit as an Investment option is as old as the hill. The dynamic economy today opened a door for many types of investments but, fixed deposits have its own special place even today. Automobile revolution in India is on rising during recent past due to growth in the level of disposable income and supportive finance schemes. Even the middle- class sector in India is now able to own their dream car without much hassle. There are many options to put your car on a drive with the help of car loan Hyderabad, now let’s look at how you can use fixed deposits to obtain a car loan.
Regular auto finance
The borrower chooses the make and brand of the car which he/ wants to purchase after extensive research. On comparing multitude benefits offered by the lenders and their interest rates, the borrower takes a call of action to apply for the loan. On examining the credit score and repayment capability of the borrower, the lender sanctions the car loan Hyderabad at tailored interest rate. This is secured loan where car itself serves as collateral and the ownership is transferred to the borrower after the final instalment on the car finance is complete.
Fixed deposit car loan
With the extensive number of cars waiting to be driven out of showrooms, there is an increase in the number of dealers approaching for auto loans. When your credit score cannot fetch you loan needed, fixed deposit can serve the purpose. The banks consider fixed deposit auto loan as overdraft facility than a regular loan. The car loan Hyderabad sanctioned using the fixed deposit will be 80%-85% of the deposit at the bank. Here, you will be using the fixed deposit as a collateral to obtain the loan. The interest rate of these car loans against the fixed deposit are very low when compared to regular car loan makes it an attractive option for many.
Difference between regular car loan and fixed deposit car loan
- A regular car loan is sanctioned against your repayment capability and credit score whereas Fixed deposit car loan is sanctioned against the fixed deposit as evident by the name.
- The interest rate on the fixed deposit auto finance is comparatively low when compared to regular car loan because your fixed deposit acts as collateral for the loan and they have high liquidity.
- When you take a regular car loan, the lender will withstand the ownership of the car till the loan is completely paid off. On the contrary, in the fixed deposit car loan, you will be owner of the car as soon as you purchase car
The best part of these fixed deposit auto loans is there is no processing fee, other related charges or prepayment charges. You can prepay auto loan anytime during the tenure without any charges.