September 29, 2023

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Steps to Buy an Electric Vehicle on EMI Using a Personal Loan

How to Buy an Electric Car - NerdWallet

Air pollution and the surging costs of fuel have made vehicle owners look for alternate options for commuting. Electric vehicles are, thus, becoming increasingly relevant and steadily gaining traction in the automobile market. They are eco-friendly and also save fuel costs. With an increased demand for electric vehicles, almost all automobile manufacturers are launching their electric models to appeal to the changing preferences of vehicle buyers.

Are you also thinking of investing in an electric vehicle?

Electric vehicles are usually more expensive than their fuel counterparts. That is why you might need a loan to finance one. Personal loans are available to help you buy an electric vehicle of your choice. Moreover, the interest that you pay for the loan can be claimed as a deduction from your taxable income under Section 80 EEB. The deduction limit available is Rs.1.5 lakhs.

While personal loans are available for buying an electric vehicle, you should know the steps involved in availing of the loan. So, here are the steps to follow to buy an electric vehicle through a personal loan:

  1. Check your eligibility 

The first step in availing of a personal loan for an electric vehicle is to ensure that you are eligible. Every lender has a set of personal loan eligibility parameters. Check your qualifications against these parameters to find out the amount of loan that you can avail of.

  1. Compare loans to find the best deal

After you have determined your eligibility, you need to find the best lender for the loan. Almost all banks and NBFCs offer a personal loan that can be used for buying an electric vehicle. You need to compare the personal loan interest rates charged by different lenders to find a lender that offers the desired funds at the lowest interest rate. Comparing helps you find the best deal on the interest rates so that the loan becomes affordable. So, don’t miss this step. 

  1. Arrive at a suitable EMI

The EMI of the loan depends on the loan amount that you borrow and the repayment tenure that you choose. You need to ensure that the EMI is affordable so that repaying the loan does not impact your budget. To do that, you can use the personal loan EMI calculator. Just enter the loan amount and tenure, and the calculator will calculate the EMI. Change the amount and/or tenure to find the most affordable EMI before you apply for the loan. 

  1. Arrange the relevant documents

Once the steps above are completed, you can apply for the loan. However, before you apply, keep the loan-related documents handy so that you can submit them with the application. You would just need some basic documents like your KYC documents, bank details, and income proof. Arrange these documents and keep them on you.

  1. Apply for the loan

The last step is to apply for a loan. You can apply online or offline, although the former mode is more convenient. Nowadays, most lenders offer the online application mode, which is quicker and gets the loan sanctioned at the earliest.

Once your loan application gets approved, you get the funds needed to buy the electric vehicle that you want. Thereafter, you can repay the loan in EMIs over the chosen tenure, all the while using the vehicle that you have bought. 

So, understand how to apply for a personal loan for buying an electric vehicle. Use the steps, invest in a suitable vehicle and make your contribution towards a better environment. Also, use the tax benefit available Section 80 EEB to claim deductions on the interest paid towards the loan and reduce your tax liability too.