What Is Car Loan? Full Explanation About Car Loan

What Is Car Loan?

Car is a type of loan in which you get loan for buying car, and I know that first thing you want to know is how much interest we have to pay for getting the car loan, so you have to pay the nearby 7% interest, so this is not fix, if you are going to get the car loan then I will suggest you to please first do research on where you can get the minimum interest rate on car loan, and you can do this with the help of google.

How Much Amount Can You Get In Car Loan?

So it will depend on your monthly income and if you are a business man then you have to show your annual profits then the bank will decide that how much loan they can give you, if you are thinking that why they need these things then let me explain you, they just want to know that you can repay the loan or not, because if you are unemployed person then how you will repay the loan, and if you are the business man then they also see the stability of your profit because if your profit is not stable then there is higher chance that they will not provide you the loan.

There is also one more method of deciding the loan amount for car loan, so is the government method means this method is applied by government banks, so in this method you have to just show your annual profit or monthly income and they just multiply your monthly income with 24 and your annual profit with 2 and the result will be the amount which bank can can give your as a loan. And I also want to tell you that the bank will not give the whole amount of money they will just give the 90% money of your car which you want to purchase and they will not give you loan amount they will directly pay the loan amount to the dealer.

Document For Getting Car Loan

These are the document that you have to provide to the banks:

1) The KYC documents

2) Income Proof

3) 5 passport size photos

4) Quotation Of The Car

Now I want tell you that if you have provided these documents to the bank then bank will decide that they should give you the loan or not, and if your civil score is good and these document is correct then they will provide you the loan but if they decline the loan then it is simple that they found your civil score is not good. Civil is score is important everywhere if you want to get the loan or you want to get the credit card.

The Best Bank For Car Loan?

So if your want to know the best bank for car loan then the best bank is bank of Baroda, this bank will give the interest of 7% and if you want then you can also research on this topic on google as I have already told you above. And this bank will give you the loan amount minimum 10k to the 1Cr and you can also decide the repayment time yourself, in my thinking this bank is good for car loan but if you want to go with the government bank then you can also check the things about the SBI bank, I am suggesting you the SBI bank because this is the best government bank in my thinking.

Should You Buy Costly Car With Car Loan?

No, there is two different situation for you to get car loan, first one is if you need a car then you should definitely buy car but should not buy the costly car because this is not your real money this the virtual money which is provided by the bank as a loan, you also have to repay the loan and you also have to pay the interest on that car loan, and now let me tell you that how to decide that which car which should buy or how to make budget for buying the car, or should we buy new car or old car, so now let me begin with you should buy the new car because in my thinking the second hand car or second hand product are not good in some cases if you have the ability to check the condition of the second hand car then.

First of all check everything of the car and if you don’t have the ability to check the car then take your friend with you to check the car, and if he approved it then buy it otherwise if you are seeing the car is not in good condition then please don’t buy that car even if the car have the only one thing bad because if you are finding that car is not good now then it could be possible that you have to spend some money in that car to make the the car’s condition good, but please don’t think that the bank can give the 15 Lac money for buying car now let’s buy the new car which is luxury, please get car loan when you need a car not for your want.

Why Rich People Get Loans While They Don’t need it?

So now let me tell you that why rich people get loans while they have already lot’s of money and they shouldn’t even think about the loan, so they get loan for showing that in there accounts of the company, so that they can save there taxes. Now if you will now take the example of the Elon Musk like he doesn’t bought his house with his own money he bought the house by getting loan.

Now maybe you have understood that why rich people get the loan and how loan is very useful if you know the best way to use it. Now let me tell you that how you can use the loan for earning more money from it, let’s take one example and understand it completely for example if you want to buy a house then you shouldn’t buy a house by full cash payment because if you will do this then you will not able to save your money because if you will buy the house with the loan amount then you can also earn more interest on the money that you have saved for the house.

You can simply pay the half amount of the house and make installment for half payment of your house and you can use the loan amount to pay the loan and you can get some FD or some any type of investments so that you money can be more in some upcoming years and do you know that the you will earn so much profits if you will use this trick.

Now maybe some of you will thinking that I don’t know the game of loan and why the commercial banks give us the loan and how they earn profits by giving us the loan, so let me explain you this so now let you are depositing the money in the bank with 4.26% interest and the bank get your money and give it to the people as a loan, give them the loan on higher interest for example if they are giving you the interest on your money 4.26% then they will give the loan to the people on 6.39%, the difference between these interest(4.26% – 6.39%) be the income for them it’s 2.13% of the loan amount given.

So now you have also understand the game of loan, so now let me tell you that if you want to get more knowledge about the loan and want to get some knowledge about the making money with the loan or want to know about how to save your taxes then you can simply read the book “Rich Dad Poor Dad”. This is the great book about the financial knowledge that you should have, so let me tell you about this book, the author of this book is “Robert Kiyosaki” who was a child of a normal man who was doing job and earning his living.

But his friend’s father was not like this he was thinking that people should first think about making some assets for him for example if you are thinking that you have money let’s buy a new car then it will be your liability, I will talk about the liability and assets in some next articles don’t worry about it. So this was some example from the book of “Rich Dad Poor Dad”.

Why Is It Good To Buy Car On Installment?

So when you have saved the money for buying car then you should think that you have to show all the taxes information, if you will buy the car on full payment like if you want to get a car with full payment then let me know you that the you have to show the income tax information on that tax, for example if you are buying a car which costs you nearly 7 Lacs then you have to also show that you have paid the tax on that 7 Lac rupee.

So the solution is very simple you can simply buy the car on installment and make installment for some more then normal installments year, all thing that I want to tell you is you have to make very small installment less then 40 Thousand Rupees, so that you can’t caught. And if you will read some books about the taxes then you will find that there are so many ways that how you can save taxes or pay minimum taxes.

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