One of the most meaningful investments in your life will be the one that you make in your car. Now, most of the people buy their first car with the help of car loans as they are hassle-free and easy to pay back. However, there are some things you must keep in your mind before opting for a car loan Take a look at the five critical factors to consider before you agree to take the car loan.
Facts to Know About Car Loans
1. Make Sure to Get The Best Interest Rate – Don’t just go to one bank or lender and agree to the loan with the interest that they impose on you. Since there is no predefined rate in the market, the interest charged by different banks will be unusual. Make sure you talk to a lot of lenders so that you can ultimately compare the rates and choose the one that has the least interest rate. Even a 0.1% difference can save you lots of money when it comes to car loans.
2. Get The Right Documents – Every lender will follow specific KYC guidelines before granting you the loans. For that, they will ask from you the same set of documents for verification. So make sure all of these documents are pre-verified in your case if you want the car loans to be processed quickly. This will give you greater leverage if you are dealing with a car dealer. It is a strenuous task for the people who don’t have these documents to get the car loan and many a time the loan is not granted if they fail to produce these necessary required documents.
3. Choose The Tenure Wisely – You might think that you will be able to repay the car loans in no time. However, in the case of loans, it is better not to be overconfident and choose the plan that suits your means and income. Take your time and choose a long tenure. If you get the money before the allotted period, you can always repay it before the term ends. You might also be tempted to choose a more considerable tenure seeing the small amount of EMI that you have to pay. However, these are delusional, and a longer tenure usually means that you are losing more money by spending more and more interests. So, make sure you choose car loans wisely.
4. Calculate All The Charges – It is not just the interest that you are paying. Along with it, you are also giving the processing fee, the penalties of foreclosure, the service tax and a lot of other things. So, make sure you are aware of all these amounts individually and then calculate your total expenses to get a fair idea about how much you have spent on the car loans.
5. Scrutinise the Offers – Many a time in the bank there are a lot of attractive deals as well as proposals on the car loans. They will try to hide these facts from you because they want to get more profit. However, when you are going to the lender to be well prepared about all the ongoing schemes which might help in the reduction of the cost. This can save you a lot of money. Do thorough research on the offers on your own and stick to the offer that suits you the best.
So these are the five important things you need to know about car loans before you get one for yourself. These tips will help you get the best deal and you can buy the car of your dreams without any hindrance.