There are plenty of car finance schemes in India. Here are some useful car financing tips.

Automobile Loans

These days getting an automobile loan is quite easy. Organized and institutional auto finance has come of age and companies are aggressively marketing auto loans schemes by offering innovative and tempting offers to the customers.

Most of the lending institutions finance up to 90% of the cost of the car, depending on the model of the car and the repayment period.

Types of Automobile Loans
We are explaining some of the popular loan schemes. Select a scheme that suits you best.

Margin Money Scheme: Under this scheme, you are required to pay margin money of at least 10% of the total loan amount, along with one EMI. The balance amount is paid through post-dated cheques, which are issued for the balance EMI's covering the remaining period. With a repayment term of one to five years (in some cases seven), the Margin Money Scheme is the most sought after. One of the major advantages of this scheme is that it has lowest EMI to be paid, compared to other schemes for the same amount of loan.

Advance Equated Monthly Instalment Scheme: This scheme offers 100% loan. You have to pay up to five EMIs in advance and the balance is paid through post-dated cheques covering the remaining period of the loan. One of the downsides of this scheme is that though it offers 100% finance, you need to pay five to nine installments up front. Besides, you go on to pay a higher EMI amount because the interest is charged on the entire loan amount.

Security Deposit Scheme: Under this scheme you are required to deposit a specified sum as security deposit against the amount provided as the loan. This security deposit is refundable on completion of the full period of the loan. You will receive interest on the deposit, which in most cases is lower than that charged to you on the loan amount. The EMI under this scheme is higher than the EMIs under the above two schemes. The security deposit ranging from 10-30% of the total is returned after the loan period. The deposit also earns a simple or compound interest, the tenure lasting for two to five years.

Hire Purchase Scheme: This is an agreement under which the car is let on hire and under which the hirer has an option to purchase the car in accordance with the terms of the agreement. Hire Purchase agreement is mostly offered by Non Banking Finance Companies. Broadly this option works similar to the loan option. NBFCs usually charge an amount as low as One Rupee, called Option money, on payment of which the car passes on to the hirer. The NBFC's have taken to this option, as they are not encouraged to give loans, which is a Banks privilege.

Lease Financing Purchase: Lease is a contract between the owner of an asset (the Lessor) and its user (the Lessee) for the hire of that asset. The ownership rests with the lessor while the right to use the asset (car) is given to the lessee for an agreed period of time in return for periodic rental payments by the lessee to the lessor. Lease agreements are offered by NBFC's and are mostly availed by Corporates looking at it mainly from tax saving angle.

Citibank Car Loans
Citibank car loans are available for new and used cars. One can also leverage a car to meet cash needs. Existing Citibank customers get preference while applying for car loans.

HDFC Bank Car Loans
HDFC Bank loans can be availed for purchasing new and used cars. Brief information about the loan-specific requirements of salaried and self-employed have been mentioned below. For partnership firms, private limited companies and public limited companies, separate set of rules and regulation have been set up.

ICICI Car Loans
ICICI Bank offers car loans up to 90% of the ex-showroom price of the car. Loan tenure can be extended up to 6 years which makes it easier to repay. ICICI Bank is the top financier for car loans in India. The bank has a network of more than 1800 channel partners in more than 1000 locations.

Maruti Finance
Maruti has entered into agreements with several finance institutions to arrange for finance for its customers. Under the program, lucrative financial deals are offered for the customers.

Saraswat Bank
Saraswat Cooperative Bank, an urban co-operative finance institution, is the first co-operative bank to provide Merchant Banking services. The bank was conferred with Scheduled Status by the Reserve Bank of India on September 1, 1988.

SBI Car Loans
State Bank, the largest bank in India, offers attractive auto loans. State Bank Auto Loan has low interest rates, easy repayment options, and total transparency. Finance package includes vehicle registration charges, insurance, one-time road tax and accessories.

Sundaram Finance
Sundaram Finance Group, among the leading car loan providers of India, provides loan for all types of cars through its network of 150 branches spread all across the country. With minimal documentation, Sundaram Finance offers loans enabling one to purchase a car.