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Buying a car this Diwali? From processing fees to insurance, don't ignore these 5 charges before applying for a car loan
Mint 2 hrs ago·4 Nov 2026, 5:34 pm
As the festive season approaches, car dealerships are rolling out attractive financing schemes to boost sales. However, while the low interest rates and zero-down-payment offers might look appealing, they often come with hidden costs that can significantly increase the overall expense of owning a vehicle. Understanding these charges is crucial for making a financially sound decision.
Investors should pay close attention to the fine print, as these extra charges can vary widely between lenders. Common fees include processing charges, documentation costs, and mandatory insurance premiums. These upfront and ongoing expenses can add a substantial amount to the total cost of the loan, impacting your monthly cash flow and the total interest paid over the loan tenure.
Before signing any loan agreement, it is essential to compare the total cost of financing across different banks and NBFCs. Investors should also check for prepayment penalties and the flexibility of the repayment schedule. Being aware of these factors ensures that the excitement of a new purchase does not lead to a long-term financial burden.
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