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You take a Car Loan to buy a car and regularly pay your EMIs. A few months later, you receive an unexpected windfall – proceeds from a sale of property or a bonus at work. You are wondering: Should I prepay my Car Loan? What are the advantages and disadvantages of prepaying? Here’s everything you want to know about Car Loan prepayment.
What is Car Loan prepayment?
A bank gives you a loan for a certain term (12 months, three years or seven years, whatever it may be). You repay it in easy monthly instalments till the term is over. When you opt to pay off the loan before the completion of your tenure, you are prepaying your loan.
What are the benefits of prepaying a Car Loan?
The biggest benefit of prepaying a Car Loan is that you clear off a debt and don’t have to make monthly payments. When you pay off a Car Loan, you release the hypothecation on the vehicle and have full ownership. Apart from this, lenders will also offer additional benefits. For example, HDFC Bank offers zero foreclosure charges to selected customers.*.
Each lender will have their own terms and conditions when it comes to their respective Car Loan prepayment offering. It is best to review the prepayment clause from your respective lender to see if it benefits you, before taking a decision.
If you have bought your car for business use, and are claiming tax deductions on interest payments, it is ideally recommended to see if you are eligible for the prepayment clause.
How does one prepay a Car Loan?
You can prepay your Car Loan either in part or in full. If you are prepaying in full, make sure you collect any post-dated cheques you may have issued and get proper closure of your loan.
When should you prepay your Car Loan?
If you have the funds to prepay and have no plans of using it for any other purpose, you can consider prepaying your Car Loan. But first, clear other debts that may have higher interest rates. Consider the impact of prepayment charges if any.
In case you are planning to sell your car, you may have to foreclose the loan to transfer ownership. Some banks allow you to transfer the loan along with the ownership, provided the new owner is credit-worthy.
Now that you aware of the process, are you ready to pre – pay your Car Loan?
Looking to apply for a Car Loan? Click to get started!
Confused about applying for a Car Loan? Know more about how to choose the perfect Car Loan now!
* Terms & conditions apply. Loan disbursal at sole discretion of HDFC Bank Ltd
They say, “All that glitters is not gold.” While this may be true in most cases, when Indian festivals come around, you can be sure that the glittering yellow metal hanging off people’s necks and hands is indeed, gold
A new year always coincides with the launches of new models and variants by auto manufacturers, making it the ideal time to buy that new car or bike that you were thinking about. But before you take the plunge, here are some tips to keep in mind:
If you have been dreaming of a vacation since a long time, don’t let the trip costs hold you back.
Weddings come once-in-a-lifetime. And you want it to be perfect in every way. A personal loan makes your dream wedding possible. Get complete peace of mind about finances for your big day with a marriage loan.
A personal loan is one that is provided by a bank to fund a financial need or immediate cash requirement, be it for business, family wedding, studies or foreign trips. The bank will not question you about the end use when you are applying for a personal loan
Personal loans are loans that do not require collateral or security and is offered with minimal documentation. You can use it for any legitimate personal need. Like any other loan, you must repay it according to agreed terms with the Bank usually over a few months to a few years in easy equated mont
When you have a clean credit history and a track record of financial discipline, you may become eligible for a personal loan pre-approval.
Whether you want funds for a family wedding, a foreign holiday, child’s education, home renovation or medical emergency —a personal loan is the ideal solution for your urgent financial needs.
A personal loan is useful to fund a range of financial needs, including home renovation, children’s education, medical emergency, family wedding or a dream vacation.
Emergencies may happen rarely, but they are always unexpected. And when you are faced with a tough situation, you may need funds quickly.
Ask yourself these questions before you decide to apply. From how to apply for a personal loan to personal loan requirements, we have the answers to key questions that you may have.
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Consistency or concession – what do you need for your home loan premiums?
Thinking of travelling the world or planning the perfect wedding?
You might be eager to pay off your loan. But is prepayment always the smartest option? Find out.
EMI is one of the most important aspects of any loan that you take. EMI stands of equated monthly instalments. It is the amount you will have to pay every month till the end of your loan tenure
Two questions that most people have when they take a personal loan are: How much loan can I get? How much will I have to pay out every month?
Be it a wedding, children’s education, a medical emergency or foreign travel, a personal loan is a great way to raise funds for a wide range of personal needs. You can get the funds quickly, with minimal documentation. You can repay the loan over many months or years in easy monthly instalments.
At times you need to borrow funds to finance large purchases, consolidate existing debts or even seek short term help. HDFC Bank offers a wide range of financial products that can be borrowed to suit your financial requirements
The convenience of internet banking comes with its own set of risks. Learn how to keep your online transactions safe.
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