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Are you ready to take a car loan?
As soon as you have decided to take out a loan for a car, you are creating a new financial obligation for yourself. Ekram Kabir writes

          So, you want to buy the car of your dreams. There's a good news for you. HSBC Bangladesh and Rangs Limited recently launched a car loan campaign where customers can buy brand new Mitsubishi vehicles at zero per cent interest for the first year.
But as soon as you have decided to take out a loan for a car, you are creating a new financial obligation in your life. At present, Dhaka is a witness to a plethora of car loan options almost all of them through commercial banks.
Auto Loan from Standard Chartered Bank is one of such option. Standard Chartered (or Stan Chart as it is affectionately known to most of its clients) lets you choose your loan tenure, cash security requirement and a loan amount up to BDT 4,000,000. You do not need to have a Stan Chart account but you do need to have another account with a Dhaka based bank. The scheme makes a distinction between brand new car and a reconditioned car. With a brand new car, you can have a maximum loan amount of offers a loan amount of up to 75 per cent of the car value that can be payable in a maximum of sixty monthly installments. With a reconditioned one, if your car is less than 4 years old from the date of manufacture, you can get finance up to 75 per cent of the assessed value of the car.
In both cases, you can take anytime between one to five years to pay back the loan. You also have the option of partially or wholly pre-paying your loan after a minimum of 12 months of loan disbursement. In fact, Stan Chart will even recommend the right car dealer for you just in case you are still in the dark as to where to go.
The Hong Kong and Shanghai Banking Corporation Limited (known as HSBC) also has some great deals to offer. In order for you to apply for an HSBC car loan, you have to have an HSBC account (another account at any other bank in Dhaka will not do), at least 25 years of age and a minimum monthly income of BDT 25,000 with two years of service. Self-employed individuals can also apply subject to proof of income. The scheme covers loans ranging from BDT 50,000 to BDT 2,000,000.
The loan amount is up to a maximum of 70 per cent of the value of both reconditioned and new cars. Be warned though since the loan will not cover registration, insurance and other costs. Loan repayments can be made in monthly installments and you have the flexibility of choosing the repayment method (12, 24, 36 or 48 installments).
In fact, to make things even easier, your monthly installment will be automatically debited from your personal account held with HSBC. Interest rates range around 15.5 per cent while a 0.5 per cent processing fee is charged. Loan applications usually take around three days to clear.
Dhaka Bank offers you yet another option. In odder for you to secure a Dhaka Bank car loan, you need to be at least 25 years old and earning BDT 15,000 with salaried employees having a record of a year's worth of confirmed service and self-employed professionals and businessmen having at least three years of confirmed practice in the area of profession. Currently Dhaka Bank is offering two different schemes; one for service holders and self employed professionals (Scheme A) and another for businessperson and people with property income (Scheme B).
Under Scheme A, you can get a maximum of 70 per cent of the car price ranging from Tk. 100,000 to Tk. 700,000. Registration, insurance and other expenses will be borne by the applicant. Scheme B offers you 100 per cent of the car price ranging from Tk. 100,000 to Tk. 10,00,000 and guess what, you will also get one per cent deduction in the interest rate. A word of caution: you have to provide Sanchay Patra or FDR amounting to 40 per cent of the loan amount as security. Registration, insurance and other expenses will be borne by the applicant.
Whichever scheme you choose, you can repay the loan in equal monthly installments with the flexibility of choosing your loan tenure from 12, 24, 36, 48 and 60 installments. However, maximum repayment installments allowed under this scheme are 48 for reconditioned cars and 60 for brand new cars. Early settlement of the loan is allowed after six months and there is no penalty for such pre-payments. Partial pre-payment of the loan is not allowed. Two per cent of the loan amount will be realised in cash as processing fee before disbursement of the loan with a non-refundable verification fee of BDT 500 at the time of applying for the loan.
Prime Bank is the newest kid on the car loan block and has some very tempting offers. Like most other schemes that this scribe has written about so far, you need to offer proof that you are either self employed or in service with a reputed organisation. The good news is that you can be as young as 20 to have access to the Prime Bank scheme. You can get a loan up to BDT 3,000,000 while the rate of interest charged is 16 per cent and another two per cent charged as application and processing fee. You can take a maximum of three years to repay your loan in easy installments.
Whichever loan scheme you choose, remember that you are creating a new financial obligation in your life. If you can afford it,fine. If not, think twice.


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