What are the different car finance schemes available?
The different car schemes available are – Margin Money Scheme Margin Money scheme is the most popular of all car finance schemes. The finance offered is based on the total value of the car. The amount financed can vary from 90% of the car value to 70%, as per the financier’s eligibility criteria. The balance amount has to be paid by the customer as margin amount or down payment. Interest is charged only on the amount financed. The repayment of the loan is made by EMIs at the end of each month through post-dated cheques, which are collected at the time of signing the contract. Both, banks and finance companies (NBFCs) offer this scheme. One Advance Instalment Scheme This is a variation of the Margin Money scheme where the financier collects an additional Instalment in the form of the first month’s EMI along with the margin / down payment. The scheme has become a standard scheme, with most financiers pushing it as their favorite. The balance EMIs are paid at the start of subsequent month
