Sameer Majhi got a job last year with a public-sector company in Orissa. The first big purchase he wanted to make was a Hyundai Santro. However, as he did not have any savings he decided to delay the purchase by a year. Now that he has saved enough money for the down payment, he wants to take a loan to buy the car. He asked Express Money to suggest which lender would offer him the best loan rates. While interest rate is definitely the most important consideration while taking a loan, certain other issues also require your attention.

Choose the right car. The first step in the entire purchase process is to decide which car you want to buy. Before deciding, evaluate the features of comparable products. For instance, if you plan to buy a Hyundai Santro, compare its features with those of other hatchbacks in the category such as Maruti Wagor R, Zen Estilo and Chevrolet Spark. Likewise, if you intend to buy a Swift Dzire, look at the other sedans in the same price range, such as Hyundai Accent, Mahindra Logan and Ford Ikon.

Determine the EMI. “Once the product has been decided, decide how much EMI you can afford to pay each month,” says Satkam Divya, managing director and chief executive officer, Rupeetalk Financial Services. That will help you determine the tenure for which you should take the loan.

Choose the lender. The next step, says Divya, is to select the lender. “After last year’s financial turmoil, private banks have been reluctant to extend vehicle loans. In the present scenario, it is better to opt for a public sector bank (PSB) as their rates are competitive and they appear keener than their private sector counterparts to extend credit. Even car companies are saying that PSBs are more willing to lend and that their rates are more attractive,” he says.

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