THERE are two schools of thought on almost everything under the sun.

For example, you may believe, 'He who hesitates is lost'. Your friend suggests, 'Look before you leap'. It just means that you and your friend have a different approach on risk.

Or you might say, 'Birds of a feather flock together', while your friend thinks, 'Opposites attract'.

There are always two ways of looking at the same thing, even if it is about your car loan.

Car loans are shooting up in popularity, with the auto loan industry processing as many as 75,000 to 80,000 applications every month! And you can finance yourself up to 80 per cent to 90 per cent.

Here is what you usually do:
i. You approach a bank after taking into account its interest rate, distribution strength, brand image, time taken for disbursement and processing fees. Interest rates range between 8.5 per cent and 10.5 per cent per annum.

ii. You clarify whether your loan is a reducing balance loan and how often reduction is taken into account. You also keep processing charges and penalty charges for prepayment in mind.

iii. You find out how much you are eligible for before you start filling forms. Typically, banks insist you should have completed at least two years at your current job if are in the salaried category.

Now how about a new school of thought? Don't approach any bank. Speak to your dealer for a discount. Your dealer is equipped to pass on certain discounts to you if you just ask.

Executives at Maruti dealership Vittesse, say, "We offer our customers 50 per cent discount on the insurance amount and an additional three per cent additional. Customers can get the discount adjusted in their Equated Monthly Instalments or avail of it upfront. But if you approach the bank directly, you cannot avail of the three per cent discount."

Too good to be true? Sometimes it is.

Car dealers will not always offer you a better deal compared to your bank. But when it comes to paperwork hassles, you will save precious time with the dealer, since he will take on the responsibility.

If you have taken a car loan from your bank for your first car, consider approaching a dealer for your second.

Now your friend might tell you, 'Don't change horses midstream'.

But you could always say, 'Variety is the spice of life'!

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