REVEALED: Six secrets to reduce your car loan EMIs :Rupee Times in Rediff

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A look at few things about car loans which can save a lot of money for every car loan customer.

Believe it or not, buying a car is still considered a status symbol in India. Though the advent of the small car has created a huge dent in this reputation, the fact still remains that a car is a cherished dream of every Indian. And owning a car is made simpler by the fabulous offers by various banks and car finance companies in India on almost every car model.

Now, you don't need to book a car (most of the models) in advance, there is no requirement that you pay entire cost of the car in cash, just pay a part of the total cost, add some creditworthiness and rest is taken care of by a decent car loan.

Almost every car, be it used or new, is financed and acessible to all those who inspire confidence in banks and car finance companies.

With the car loan taking so much importance and lots and lots of information bombarded on the average consumer via different media, it is very easy to get lured into a trap. To know the intricacies of car loans is the only way one can avoid getting into an unwanted situation and later repent in leisure.

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1. Borrow as little as possible

Remember every paisa you borrow has to be paid back to the bank or finance company with interest. So, the less you borrow the better it will be.

In addition, the interest payments will be lesser and loan can be paid off within a short period. This also means that you should pay a good sum as the down payment for your car loan.

Of course, arranging this down payment can be a daunting task, but if you are able to do it without pushing too hard, go for it.

2. Popular models have better interest rates and good tie-ups

If you are looking for a model, which is rarely seen on road, be prepared to shell out more. Higher interest rates, processing fees, down payments and other charges greet those who are looking for an offbeat model.

On the other hand cheaper terms make the popular models better option to buy. Good reputation, great after sales service, and low maintenance make a car popular and backed by a good car loan they become simply irresistible.

3. An on road price car loan is definitely better than ex-showroom one

Banks providing car loan at on road prices include the registration charges, insurance, road tax and other costs associated with the car purchase thus making it a comprehensive solution.

On the other hand if you go for a car loan at ex-showroom price, you will have to shell out the road tax, insurance, registration charges and any other costs from your pocket and this will be in addition to the down payment you have made.

4. Compare and find the lowest interest rate and EMI

The car loan market is very competitive, and there are many players vying for your attention. By all means contact them and ask for quotes.

Choose the one, which offers the best deal on your favourite model.

5. Processing fees and other costs are negotiable

Do you have consistent credit card repayment record? Does the bank see you as a credit worthy individual?

In that case, chances are good that with a little negotiation you can get the processing fees waived off. Banks want customers who can take a loan and repay it completely with interest. A trouble-free customer always has more worth than processing fees.

6. An offer which looks too lucrative can be deceptive

Dealers and small time companies, in order to lure in needy customers, come out with sugar-coated offers which appear too unreal.

By posing as agents of big lending companies and banks, they take guarantee to provide a car loan for persons with all backgrounds and without any checks on income and other credentials. These offers can land you in big trouble. So beware!

Remember, information is power and this applies to car loans also. The more you know about them, the better equipped you will be to negotiate a good deal.