You have been making a lot of effort in researching the car you want to buy. Different brands, models, performance, there are so many factors to consider before buying a new car. But do you know, what all things you need to know before availing a loan for your new car?
As important as it is to look in detail the performance of the car you are going to buy, it is equally important that you understand the basics of applying for a car loan. Read below to understand different factors that affect your car loan Emi and how can cut out on unnecessary expenses.
Down payment: Down payment is the amount that you will pay in lump sum at the time of purchasing a car. The higher the down payment, the better car loan interest rate you will receive on your loan.
Interest rate: Some institutions provide car loan at fixed interest rate while some offer variable interest rate. Fixed interest rate will be slightly higher than the variable but it will save you from the risk fluctuations in the interest rate.
Loan tenure: Tenure of your car loan will determine the final cost of the car loan. If the loan tenure is of shorter period of time then your Emi will be higher and vice versa.
Loan process: This is one of the most important things that you need to keep in mind before availing a car loan. Be it the eligibility criteria or the documentation, it is vital that you choose the lender that offers convenient process. There are several lenders that have online portals, enabling you to apply for car loan application online.
CIBIL score: Keeping your CIBIL score high will help you avail car loan at better interest rates. CIBIL score is nothing but representation of your credit history. The better the credit history, the better car loan interest rate you avail.
Buying a car loan these days may be easy but difficult at the same time. With so many number of car loan providers available in the Indian market, it can be a puzzling affair to decide on one. Do not give up on the decision making process and buy a car loan blindly. With car loans available online, it does not take much time to purchase one, however, do not take any risk with your priced asset. There are a few things that need to be taken into serious consideration with regard to car loans. Here are some of the tips to purchase the right car loan:
Check the different interest rate offering by different banks providing car loan. While there is no rule of opting for the cheapest one but ensure that you are not being cheated in any manner. If it is possible to receive a particular interest rate, find out the reason why and buy it from a reliable car loan provider.
EMI Calculator The car loan EMI calculator feature is available online with most of the bank websites. If you wish to seek the average cost of buying a car loan from a certain bank, visit its website. Fill in the details asked for and you will receive an average EMI amount. Through this amount, you can decide whether or not you wish to opt for the particular car loan.
Repayment of Loan Purchasing a car loan is only possible when you have the capacity to repay it too. At the time of buying a car loan, discuss the term of repayment with the bank officers. It is usually recommended that you keep minimum repayment time instead of a long period which may extend to many years.
Credit Score Check how good your credit score is before applying for a loan. This is because if you do not have well maintained credit score, your loan application will be rejected. Ensure that your credit score is good as it defines your capacity to repay.
These days, people spend a great deal of time on researching before buying a new car. But when it comes to availing a loan, they have a very little knowledge. Turning a blind eye on something as important as your car’s financing can cost you a fortune. Understanding different aspects of car financing is as important as understanding details of the car model. The below post will help you understand how to cut out on unnecessary expenses while availing a car loan.
Interest rate: Different financial institutes will provide different interest rates. Some offer a fixed interest rate, while some offer floating interest rate. It is advised to opt for fixed interest rate to save yourself from the risk of market fluctuations. Although, you may benefit by opting for floating rate, if interest rates fall in the future. But it is always a risky affair.
Credit history: You are more likely to get better interest rates if you have a good credit history. Pay off all your debts before you apply for a car loan. Also, check out on the credit score of your lender. It is always better to be on the safe side.
Negotiate: Negotiate on better deals and read all the documents carefully. Often there are hidden terms and conditions that can land you in trouble. Also, research well before you decide on a financial institution to lend you the loan.
A car loan will make it easier for you to own your dream car. But rushing into it is not advisable. Use a car loan calculator to know about EMI’s.
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