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Car Buyers, Wait and Think, before opting for a car loan. Taking a car loan to buy a car may not be the best option for you. For customers who have an existing home loan running, availing a top-up on their existing home loan to finance their car has multiple benefits. The benefits are even higher for second-hand car buyers.
Why top loan is more appealing than Car loan
- You get lower interest rates than that on a car loan: Top Up on home loans are relatively cheaper than car loans even as they are available at 0.5-1% higher interest rates than that on the home loans.
- You pay low and affordable EMIs: Top up on home loans are available at home loan repayment tenure which can go up to 25 years. Car loans are shorter tenure loans of up to 7 years. Lower interest rates and longer tenure reduce your EMIs and monthly obligations.
- No need to hypothecate your car: The property that you pledge for a home loan acts as collateral security for the top-up loans as well. You do not need to hypothecate your car to get a loan.
- Easy loan processing: Top-up home loans are quickly processed as your loan is already approved and the bank will do only a few additional checks.
- Best Option for Used Car Buyers: You save more if you are buying a used car where financing is available at even higher rates.
Choosing a home loan top-up over a car loan sounds like a smart and plausible idea that would prove to be easy on your pocket in more ways than one!