Of Women Car Loans and Independence

 

Whether you are a working woman or a homemaker, the need and desire to be independent is always there. And, very often it is our need that supersedes our desire. For working women, working late or travelling on business is pretty common, making it necessary for them to have their own personal vehicle. Relying on public transport, office cabs and app-based taxis isn’t always the safest choice. The story is not that different with our modern-day homemakers either. With husbands busy in office, these women have to take control of the home, from dropping off or picking up children from schools to taking care of the aging family elders.

Donning multiple hats also requires women to be on the move, constantly. And, in that sense being independent, be it in terms of decision-making or driving, goes a long way.

Over the years, number of women drivers has risen (almost doubled) but there’s still a long way to go.

*These cars could have been registered under their father’s or husband’s name.

Advantage Women

Now, you may be thinking isn’t buying a car a big financial burden? Honestly, it isn’t, especially for women borrowers. Banks and non-banking financial companies (NBFCs) offer lower interest rates to women. Let’s take a look:

Bank name	Interest Rates for Male Borrowers	Interest Rates for Female Borrowers
State Bank of India	9.65% p.a.	9.60% p.a.
Punjab National Bank	9.90%	9.55%

What now?

Applying for a car loan is perhaps the easiest step and requires minimal effort. What can be difficult, however, is the loan repayment. Therefore, before applying, you should know how much you are eligible for (this reduces the chances of loan rejection). [Use our Car Loan Eligibility Calculator to compute your ideal loan amount.] Once that is done, you can choose one of the four EMI options to avoid any undue financial stress:

• Fixed EMI: This is a regular EMI loan repayment option wherein the interest rate is fixed and calculated equally for the entire tenure. This has the lowest interest rate out of the all the options and you can pay either at the beginning of the month or at the end, depending on your situation.

• Step-Up EMI: This is great if you do not want to not take up too much financial stress in the first year after purchasing your car. The EMI is the lowest in the first year and then increases gradually with each passing year. So as your income increases (through increments, bonuses, etc.) so does your EMI.

• Balloon EMI: This is similar to the Step-Up EMI payment process. You can choose to pay a lump sum (up to 20% of the principal amount) towards the end of the repayment tenure to reduce financial stress in the beginning.

• Step-Down EMI: This is opposite to the Step-Up EMI where the interest charged at the beginning is higher and gradually decreases. While the interest rate is high, the total interest outgo is significantly less since the principal is paid back quickly.

Well, there you go. You are all set to drive yourself to independence.