Taking an auto loan? Crack this quiz first!

There are many factors that govern auto loans. Take this quiz to find out just what you know and must know about borrowing money for a new car.

1. What are generally loan tenure options for new cars?

a. One to five years
b. Five to ten years
c. Less than one year

Also read:

Courtesy: Investment-mantra.in

2. Is a personal guarantor must in case of car loan?

a. Yes
b. No
c. Can be required in case your credit profile doesn't meet the lender requirements.

3. Is there a pre-payment penalty on auto loans by some banks?

a. No
b. Yes
c. Depends upon lender banks

4. What are stages involved while availing a car loan?

a. Application and processing
b. Documentation, sanctioning, disbursement
c. All of above

5. How is the interest on auto loan calculated?

a. Fixed flat rates
b. Reducing balance rates
c. Either of a or b

6. Is a 100% financing of car possible?

a. Yes. But subject to some term and conditions.
b. No
c. Yes, since all banks provide this option without any terms and conditions

7. Is it essential to have a bank account with the bank that offers you a loan?

a. Yes
b. No
c. Some banks make it mandatory

8. What is 'zero interest scheme' in the context of car loans?

a. Loan seeker pays back only the principal amount
b. Loan seeker pays back principal and certain processing fees
c. No such scheme applies to car loans

9. Can one change the tenure and amount of loan taken after the loan amount has been disbursed?

a. Yes
b. No
c. Only in some special cases

10. Is 'credit profiling' significant while availing a 'car loan'?

a. No, it doesn't apply to car loans.
b. Yes, it is significant
c. Not significant at all

Summarisation on auto loans:

Auto loans can be easily availed since almost all the banks provide such loans. However make sure you take the loan you can afford to pay back and don't 'default'. Frequent prolonged delays and dishonored cheques are deemed as defaults in repaying your loan. In such a case your lender bank can seize your car after serving you proper notice but without any coercion.