Buying a car is a significant decision in life, especially when it is your first car. From the right model, features to adding essential accessories, you think of diverse aspects while selecting a car. But in the end, the decision is based on how much you can pay for it. You might have heard of instances where people give up on the possibility of buying their dream car because of financial constraints.
Financing a car may seem overwhelming if you do not know the right way to do it. You neither need to drain all your savings to buy a new car nor depend entirely on the car loan. Instead, combine both these financing options to simplify your car buying experience. In other words, it means paying a substantial amount as the down payment for the car of your choice through savings, while opting for a car loan to cover the rest of its cost. Also, there has to be a balance between the two. If you choose to pay a high amount as a down payment, it will reduce the car loan EMIs. On the other hand, you can take home your car by paying a minimum down payment at first and then pay off the remaining cost in EMIs.
Before you decide to visit a car dealership, consider the following aspects of car financing:
- Keep Your CIBIL Score in Check
Before applying for a car loan, you must know about your CIBIL score, which is a crucial parameter on which your eligibility depends. Based on the score, the bank/lender will decide on the loan terms and its interest for you. While a high CIBIL score can get you instant approval for the car loan, a poor one may result in the rejection of loan application.
So, the moment you plan to finance a car by taking a loan, make sure you know about this score. Also, ask your chosen bank about the minimum score they look for to approve loan applications. Avoid applying for the loan in a hurry when you know that your credit score is not good enough. Instead, repay the existing loans and credit card bills on time to improve it first.
- Compare the Rate of Interest
When you research about car loans offered by different banks, you may find that they offer the same loans at different interest rates. Depending on this interest rate, your loan EMI will be determined. A difference of just a few points in the interest rate can make a significant difference in the EMIs. Hence, comparing various loan offers based on the interest rates is a must.
Also, make sure you opt for a car loan from a renowned bank such as Axis Bank that offers the loan at a competitive interest rate using a hassle-free loan application process.
- Choose an Appropriate Loan Repayment Tenure
Another crucial aspect related to a car loan is the choice of a suitable loan repayment period. Based on the loan offer you choose, the repayment tenure will have its impact on the EMI you will pay every month. The longer the repayment tenure, the lower will be the EMIs to be paid. Before selecting the tenure, assess your current financial liabilities and check the amount you can easily pay as the loans EMI. Then, select the loan tenure for which the calculated EMI falls closest to your affordability.
Opting for a car loan makes realizing your wish to own your dream car a lot easier. When you are availing the loan, you are advised to be patient and look for various offers to save money. Get quotations from several banks and choose the one that best fits your needs. This way, your new possession won’t become a source of any financial burden for your family.
Bring home your dream car and give your family the comfort of happy rides!