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- Car loan for Students Tips for Young Aspirants to Own Personal Vehicles
Car loan for Students Tips for Young Aspirants to Own Personal Vehicles
Generally only the salaried individuals or persons with stable monthly income are eligible to apply and avail car loan. However, possessing a car is no more a fascination of only the ‘income group’ individuals. Students also harbour a dream to own a vehicle. Since Indian citizens become eligible to own a driving license only after they become 18 years old, more and more college and university students of affluent parents are driving their dream cars. Although banks offer car loan to those income group people who have attained 21 years age, these financial institutions also extend car finance options to students under certain conditions.
Going by the past cases, it is expected that a young student tend to worry about cancellation of his/her car loan application. However, automobile loans are considered as secured loans; the lenders can repossess the car in case of EMI default. It is true that past credit status influences new loan application, but students even without any credit history receive lenient considerations from the insurance companies. Moreover, since youth and student groups constitute a considerable percentage of the total Indian population, banks are leaving no stones unturned to fine tune their image to this strong segment by providing different varieties of car finance on easy repayment options.
The main condition to avail a student car loan asks the student to get a guarantor. Generally parents or family elders want to take this responsibility on behalf of the students. However, it should be ensured that the guarantor enjoys a good credit history. Under the loan terms and conditions, he/she agrees to pay the car finance EMI on regular basis as it is expected that the student will not be able to make the payment.
However, sometimes students are also eligible to obtain car finance even without having a guarantor. In the face of growing competitive scenario in the financial market, several banks and finance companies are taking flexible approach to strengthen their pro-customer outlook. Often securing a part-time job paves the way to get attractive interest rate for car loan. However, in this case relevant ‘income’ documents needs to be submitted. It underlines the fact the students are willing to accept the loan repayment burden.
Another crucial condition to become a serious contender of car loan is to make hefty down payment. It will show that the loan applicant is economically ‘well off’ to repay the availed loan within scheduled time and without any ‘default’. Moreover, ‘down payments’ often attract lowest car loan interest rate and other attractive conditions. However, it differs from one bank to another.
There is a note of caution for student loan applicants. Since these young individuals are prone to be carried away by their hearts rather than their brain in time of making a purchase, they may end up in buying a super luxury ‘SUV’ even by jeopardizing their future economic safe-zone. If the economic condition does not support to touch the sky it is suggested to go for an ‘entry’ level car like that of Tata Nano. It not only controls the ‘borrowed’ amount but is also quite comfortable to drive for a learner and easier to ‘park’ even at congested places. Availing ‘second hand car’ loan is also another viable option. Student car loan has enabled the young hearts to satisfy their dreams at a very early age.