By CHAITALI DUTTA

What are the documents needed for a used car loan? How does the bank pay me the amount to buy the car?
—S R Ravi
The first set of documents needed to evaluate your repaying capacity is your identity and age proof papers, including income proofs. The additional set of papers would be for the car you intend to purchase. The bank will get its valuers to do the valuation of the car to get to know the market value of the car. The age and driving history of the car will determine the loan period. They will additionally verify if the car is mortgaged to another lender. If it is already mortgaged, the paperwork and time involved get longer. You may prefer to buy a car that does not have a loan running on it. The RTO transfer papers are the next steps for this transaction. After checking the proof of your margin money paid to the seller, the loan is disbursed directly into the bank account of the previous owner.

Also Read: Key things to consider while taking a car loan; Check lowest interest rates & EMIs

How is the interest rate on credit card calculated? On rolling the credit do I have to pay the interest on every new purchase?
—Arvind Kumar
The interest for the billing cycle is calculated by multiplying daily periodic rate (DPR) by the number of days in the billing cycle. The DPR is mostly calculated by the average daily balance method. The DPR times the average daily balance will give the interest charged on your outstanding overdue balance. The Annual Percentage Rate for credit cards in India is in the range of 35-40% per annum. To answer the second part of your question, the interest is charged on the overall outstanding; so any new purchases, including all charges applied by your credit card firm, will get added to the balance and you need to pay interest on it.

Also Read: Loan Against Car: How can your car help you take a loan?

Should I take a short-term loan from a fintech as I need money to buy an electronic gadget?
—P K Malhotra
Assess the standing of the company and look for the reviews of existing loan takers, online, on various platforms. If you come across incidences where the applicant has been harassed for repayment, better to avoid such companies. Read the fine print before signing any papers or giving access to your details.

The writer is personal finance wellness expert and founder of AZUKE Finance. Send your queries to fepersonalfinance@expressindia.com