It is so obvious that with so many latest new generation models of cars zooming around you, it is hard to resist the ones for a car fanatic. And after driving your current model for years, you are looking for a better model that will give you luxury and comfort.
- If you have enough finance to support your dream car, then you are all set. On the other hand, if you are looking for financial options, there are varieties of car loans available for you. Before you get into the finance segment, do your math. Jot down a few things like your earning per month.
- You must also consider your recurring expenses which include any other loans, bills to pay, any dependencies etc.
- Average savings month on month must be calculated to avail a short term or long term loan.
- How much you can pay upfront for your dream machine is another factor to consider when you apply for a car loan.
Decide about your savings before you apply for a loan approval:
Based on your down payment and the cost of the car there are calculators available on the internet to see what your EMI would look like. Keep in mind, that you will need photographs, address proof, salary proof, bank statement, identity proofs ready when you want to avail your loan. Usually people opt for a 3-5year loan. Note the EMI differences when you change the number of years for repaying. Pick a suitable one. If you think that extending the loan period will do you good in the long run, and then you might want to rethink about that as the longer the repayment term, the higher will be the amount that goes from your pocket.
Few Things to Know before you avail the car loan
- Getting a car loan might be challenging for you when you do not have a high credit rating and have to pay the financer a high rate of interest.
- Your salary plays an important factor while availing any loan. If the loan you are requesting is more than your eligible criteria, then your loan request will be rejected.
- Some banks take the risk of disbursing loan to you at a high reducing rate of interest, which is generally not recommended.
How to get the best deal on your car loan?
Though the factor of negotiation is often overlooked, it is one of the primary steps to bring down the cost of car loans that you are opting from the dealer.
- Just like you shop for your cars, talk to several banks or financers to shop for best policies in car loan. You might end up getting a more attractive deal than what you have been offered earlier.
- Do keep a track of your credit report. It helps to determine your financial status and ensures whether you are ready to take up the burden of loans or not. Do not go for unnecessary high-interest rates.
- We all like to deck up our car with accessories. If this adds into your budget, then it is well and good. Please note that accessories make your car expensive. On the brighter side, you get a good resale value when you want to sell your car.
Loans are nonetheless, long-term commitments. Thus, it makes sense if you protect your repayments with valid insurance coverage. This protection will deal with the unforeseen events of life and ensure that your repayments of loan do not stop under any circumstances.
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