The availability of car loans in India has become quite easy these days. Organized and institutional auto finance has come of with the aggressive marketing, innovative and tempting offers to the prospective car buyers. Most of the lending institutions finance up to 90% of the cost of the new car, depending on the model and brand of the car and the repayment tenure. Under the margin money scheme of car loans, you are required to pay margin money of at least 10% of the total borrowing amount, along with one EMI. The balance amount needs to be paid through post-dated cheques, which are issued for the balance EMI's covering the remaining time period. The repayment term is generally five years (in some cases seven). One of the major advantages of this scheme is that it has the lowest EMI to be paid by the borrower, compared to other schemes for the same amount of loan. The Advance Equated Monthly Instalment Scheme offers 100% loan to the prospective buyer. You have to pay up to five EMIs in advance at the time of loan approval and the balance is paid through post-dated cheques covering the remaining repayment period of the loan. One of the downsides of this scheme is that though the finance is up to 100% , you need to pay five to nine instalments up front at once. Besides, you go on to pay a higher EMI amount because the interest is charged on the entire loan amount, not on the balance. Under the security deposit scheme you are required to deposit a specified sum as security deposit against the car loan amount . This security deposit is refundable once you complete the full period of the loan. You will receive interest on the deposit made earlier, which in most cases is lower than that charged to you on the entire loan amount. The EMI under this scheme is higher than the EMIs under the above two car loan schemes. The security deposit ranging from 10-30% of the total is returned after the loan period is over.