Buying car is certainly a great feeling for many who own it for the first time. It is now a day is one of the necessities. In earlier days having a car in ones home means the family is very rich and enjoying the luxurious life, but what happen that it converts from goals to necessity, it is just because of the standard of living increases and of course there are various other factors in it, and one of the changes that makes buying a car easy is Loans.
Without proper information when opt for a car loan could possibly make owning a new car a negative experience. A little patience and market research could save you a lot of disappointment and cash later! There are several things you need to consider before deciding on getting a car loan. Because, proper planning is the key to save money in any kind of investment.
You have to be careful about a few points in order to choose the right deal. Whatever your personal circumstance is, take your time to know all you can, so that you end up with the loan that meets your needs properly. Research a lot and check out as many options as possible.
Today, there are so many options for a person to buy a car. The first thing you should do is to gather information before going for a loan hunt. Talk to several lenders, compare the interest rates of multiple loan offers and choose the deal which suits you most.
Below we present the important parameters and tips that you can use when evaluating a car loan:
– In India not every bank will offer you loan if you are below 18 or so. However, below 18 can apply for car loan in the name of their father and then finance it.
– When applying for a loan, banks will ask you to submit savings account statement, present income proof, residence proof, PAN Card and other documents. When you call the lender ask straight away about the documents required so you can have everything ready to get your loan quicker.
– Less you have to finance, the better off you will be. The greater amount you will pay in down payment for your loan, the more it will lower the cost of your loan. And it will be easy for you to pay it off. If you are not having enough money then there are still many options available.
– Usually your monthly EMI will be including principle, interest, taxes and other fees that will vary depending on your lender. The lender can give the option to choose lower monthly fees by extending loan term. If you are in better financial position then avoid it because on long run you will pay more total interest charges.
– The longer you take to pay off a car finance loan the more expensive it will be in terms of interest. This is why it is a good idea to take out a short term deal. However, if you have a tight budget then long term deals will have lower monthly repayment options which could help you to manage your finances better.
– Ask the lender about the prepayment of the Loan amount, the conditions and charges on it. Make sure you consider all of the possible options before you sign up for any finance deal.
– What follows outside India is every Loan you taken your Credit history check used to done, and on that basis your Loan Interest Rate decided, it is not generally practice in India, but maintain your Credit History without any marks on it, the system will surely going to start in India, for that just keep in mind that never do any default in any Loan
– Once you are clear on credit history and eligibility do a thorough market research about the car you want to purchase. Because proper research will give you more options that are suitable for your budget.
– The Rate of Interest is the most crucial factor in determining which lender is the best to finance your car. The very first thing obviously is to compare the interest rates offered available in market Auto loan can approximately lie between 8% to 16% of interest, so you need study carefully which bank can offer you the best interest rate.
– Some banks in India will not charge you processing fee for the loan, but some finance firm could charge you and maximum it can go upto 2%. Also be clear on how much will the bank charge penalty in case of missed payment.
– Most people are not aware that negotiation in the loan is possible. It’s a myth to think that loans carry fixed rate of interest, you can certainly bargain with the bank(if you have account or previous loan records are clear) and get the best ROI for your car loan.
– Keep shopping around and let banks and even the dealers that you are thinking of buying the car at, know what the best interest rate you have found on a loan, so far. Ask the dealers if they can come down on the price of the car, so that it will meet your expectations of a low interest rate. Let the car salesman know you are going to shop for the best interest rate on a car loan, before you buy, and not any sooner.
– Any finance company or bank will ask for third person guarantee, so you will have to be ready with a friend or relative who can assume liability in case you default the payment. Some bank may avoid this clause if having good loan repayment record.
– Buying the brand of car that will hold its value in the future, is the best deal and the best car loan consideration.
The above were a few things ‘to do’ activity before applying for a car loan.
You need to do the regular maintenance of your car. Getting regular car service and getting the wears and tears repaired on time is the key to keep your car’s condition healthy this will increase the resale value of your car.
Least but not last, maintaining car’s health and the health of your personal finances including your credit history will always going to help you in future.