Tips To Remember For Easy Car Loan Application
A two-wheeler is the most anticipated purchase for families in India. It is bought as a status symbol and to combat the increasing transportation costs. If you have decided on buying it, you would want to check out the best models and compare dealers. But it does not end there.
You must think about financing it, which is often not possible with your savings. A car loan provides you with assistance in buying your desired model. However, it comes with a repayment responsibility. So, ensuring you get a reasonable offer is essential to have an enjoyable buying experience. Read on to find some practical ways to do that.
Maintain a budget: Getting a loan does not mean you have to overspend. This only leads to a higher interest rate and equated monthly instalments. You want to choose an automobile model that fits your budget based on your needs. Also, note down the overall costs associated with the vehicle. Does it require accessorising? Do you need to make any modifications? If so, add these expenses to the price and then decide your borrowable amount.
Compare offers: Loan providers have different policies for providing car finance. This means there is no standard proposition you can expect. Therefore, it is essential to compare their quotations online for making an informed decision. You do this by visiting their websites and checking out comparison portals. You could also use the eligibility calculator provided for precise estimation.
Apply selectively: Although the online loan application is straightforward, be careful while opting in. When you apply to multiple lenders, it shows up on your credit report. This is accessible to your prospective loan providers when they examine your profile. In addition, it makes you look like a credit hungry borrower, which is not a good sign for approval. Hence, be practical in finalising the deal before taking the loan.
Contribute down payment: It is worth noting that your borrowed amount directly impacts the interest rate and EMI you get. Besides taking the car loan, accumulating enough corpus reduces the loan burden. Banks usually sanction 85-90% of the vehicle's showroom value as the loan amount. You bear the remaining 15-20%. In the case of exceptional cases, 100% financing is given. Nonetheless, you should consider increasing your contribution to reducing the loan cost.
Choose loan terms wisely: Lenders decide the loan amount, interest and tenure sanctioned to you. However, you get the flexibility to make changes to the terms for ease in repayment. Use this opportunity wisely to think about the correlated effects of the variables. For instance, a shorter tenure reduces the interest rate but increases the EMI and wise versa. Changing these combinations drastically affects your loan cost.