Car Loan FAQ

Most frequently asked questions about car loan are already answered.


What are the other costs that usually accompany a home loan?

Home loans are usually accompanied by the following costs:

Processing Charge: It’s a fee payable to the on applying for a loan.

Pre-payment Penalties: If the Housing loan is under Variable/Floating Rate loan and the loan is prepaid through any source, no prepayment charges shall apply If the Housing loan is under fixed rate, the prepayment charges shall apply except in the cases in which the customer is paying out of his ‘Own Sources’. The expression ‘own sources’ indicates that the proceeds of the prepayment should be from ‘any source other than from a bank/HFC/NBFC and/ or a financial institution’

All other Loans would continue to attract pre-payment penalty upon pre-closure, as per the terms and conditions of the loan agreement which is duly signed and executed by the customer.

  1. Commitment Fees: Doesn’t take any commitment fees from consumers, while some Institutions levy a commitment fee in case the loan is not availed of within a stipulated period of time after it is processed and sanctioned.
  2. Miscellaneous Costs: Levies a minimal charge of ` 220 only for Standard documentation charges.
What is a floating rate?

In this case, the rate of interest fluctuates based on the market lending rate. This means you stand the risk of paying more than you budgeted for in case the lending rate goes up.

What is a fixed rate of interest?

Fixed rate of interest means the rate of interest remains unchanged for the entire duration of the loan. This means you do not benefit even if home loan interest rates drop in the market during the course of your loan.

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