By Chaitali Dutta
* Do banks finance used cars? What should be the loan tenure? Will the interest rate be higher than that for a new car loan?
—Akshay Khandelwal
Yes, there are bank loans available for used cars. The tenure of the loan does not usually exceed seven years. This period may be reduced by looking at the age of the pre-owned car. Usually the interest rate for a loan for a pre-owned car would be greater than that for a new car.
* I am planning to buy a two-story house with my brother in Jaipur. As both of us have a credit score above 800 can we negotiate for a lower rate? Banks are offering us rates of 8 to 8.7%. How can we get a lower rate?
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—Vipul
A better CIBIL score translates to better bargaining power for you. You may also shop for competitive rates from a few banks/ FIs.In the current interest rate scenario, 8% to 8.7% are attractive rates.
* I had taken a personal loan of Rs 5 lakh last year. Now I will get some money from my parents. I want to repay the loan but the bank is insisting that I give account details of my parents also and their source of funds. Why is the bank asking for such details?
—R S Sridhar
While taking a pre-payment, usually the bank asks for the source of funds and you may mention a gift received from parents. But asking for the bank account details/ statement/ source of funds of your parents is not in order.
* I was a guarantor for a loan taken by a friend. He has gone abroad and has not paid the EMI for the past three months. How can I protect myself?
—Arvinnd Iyer
Signing as a guarantor is a legal commitment that expires only on full loan repayment in your case. To protect yourself from a liability that may devolve on you, you have to request your friend to provide an alternate guarantor so that your guarantee may be released.
* My bank took simple interest when I part-prepaid my home loan. How is this simple interest calculated?
—Sumit Singh
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When a cheque is deposited as prepayment into a loan account, the interest for the number of days of clearing is factored in as well. This amount is the simple interest.
The writer is a personal finance wellness expert & founder of AZUKE Finance. Send your queries to fepersonalfinance@expressindia.com