Nagaland Rural Bank Car Loan FAQs

Banks can offer a car loan upto 100% on ex-showroom value of the car or they can require some margin. The car finance amount usually is based on the car purchased as well as the profile | credit score of the applicant.

There are 4 stages involved in availing a car loan, which are:

1. Submitting a Loan Application
2. Processing of application
3. Approval of the loan
4. Disbursement of loan amount

Banks generally do not provide loan for any accessory except it is a standard fitting.

The car loans offered by banks are available for a period ranging from 5 years to 7 years. This period also varies on the basis of purchase of new car or used car.

It generally takes about 1-7 working days for processing the loan and getting it sanctioned after submission of all the required documents.

No. Its requirement is based on multiple factors like the customer financials, good credit score, loan amount etc.

Following documents need to be provided on termination:

• The Loan Termination letter
• The No-Objection letter addressed to the RTO
• Insurance Endorsement Cancellation letter

There are multiple repayment options available which are flexible as well for repayment of car loan such as monthly EMI, EMI in arrears, Advance EMI, Auto Debit from bank account, ECS (Electronic Clearing Services), Standing instruction, PDCs (Post Dated Cheques), etc.

Ex-showroom price is that price of the car which includes excise duty but excludes local duties and statutory charges.

On-road price the sum total of the ex-showroom price and cost of registration, municipal tax, insurance, octroi, road tax and cost of accessories. This price more than the ex-showroom price by around 15% to 25%. It also varies from city to city.

If the borrower pays the EMI at the beginning of the month, it is called advance EMI.

If the borrower pays the EMI at or after the end of the month, it is known as EMI in arrears. It is the standard method of paying EMI.

When the interest is paid on the entire principal amount of car loan till maturity, it is known as a flat rate EMI.

When the interest is paid on the outstanding amount each month, it is called reducing balance EMI. The main advantage here is that with each EMI, the balance principal amount keeps reducing. The EMI in this case is comparatively 10% to 15% less than that of a flat rate EMI.

Generally, banks do not charge any penalty a borrower for missing one or two EMI instalments. After missing 1 or 2 EMIs, the borrower is called a defaulter. In such case, bank has the right to seize his car. Also, on default on the payment, his credit score is also negatively affected resulting in less chances of loan eligibility in the future for him.

This is a scheme where the borrowers have the convenience of repaying the loan without any interest. This means that borrowers don't have to spend extra money on the interest, which is charged on other types of car loans. For this purpose, the car maker has to keep up his profit margin on the sales of the car and this profit is used to pay back as interest. Point to note is that the cars under the zero percent schemes are sold at higher prices and borrowers cannot negotiate in the price of the car. This scheme usually includes short term loan duration ranging from 12 months to 15 months.

Yes, it can be combined with his|her income in order to increase car loan eligibility so that he|she can get higher loan amount.

If you have a good credit score then the loan will be offered at the most competitive interest rates and other lenient terms.

Pre-payment means that you want to repay our outstanding loan amount before loan tenure. In car loans, the borrower is not allowed to make part payments, hence if he wants, he can pre-pay the entire loan after 6 months to 1 year as per the rules of the bank in this regard. However, the banks charge a penalty of 2% to 5% on the outstanding loan amount in case of prepayment.