Q - Can I get tax benefit on two wheeler loans?
A - There are no tax benefits on two wheeler loans unless you are using the two wheeler for the purpose of your business.
Q - Is a loan for the purchase of a commercial car entitled for tax rebate in form of depreciation or interest paid on account of the loan?
A - The interest payable on the car loan can be set off against the income from leasing the car.
Q - Does car loan taken from Public Sector Units like UBI, SBI etc allow part repayment which can be greater than the monthly EMIs, just to wind off the loan earlier?
A - The clause relating to pre-payment on a car loan will have to checked in the car loan agreement. It will normally attract pre-payment charges, but you will have to check the agreement to be sure.
Q - What is the best interest rate that one can get for a car loan? What can one expect even if the tenure is for 5 years, after 2 years or so we could give a bulk amount and reduce the EMI significantly for next 3 years. Is it possible with any bank?
A - Interest rates on new cars loans vary very widely depending on the car and the model since it is usual to club manufacturer discounts into the car loan rates. Though banks look at a minimum returns of around 12-13% for themselves (net of their sourcing charges), the actual cost to the consumer can be lower depending on the manufacturer and dealer discounts available. Shop around to get a deal at the lowest interest rates.
Q - Which loan should one go for for buying a car, personal or an auto loan? Which will be beneficial?
A - To buy a car, one must apply for an auto loan as it will be cheaper than a personal loan.
Q - What type of loans can be claimed for income tax deductions?
A - Home loans, personal loans and educational loans are eligible for tax deduction benefits. However, this is subject to certain conditions.
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