Getting your hands on a luxury car is the next thing that strikes your mind when you are done buying a home. No one can deny the comfort and convenience offered by owning a car. You don’t have to wait for the buses for long time or have to fear missing out that last train while coming back from work, and most of all you can enjoy your weekend getaways leisurely anytime you want.
In earlier times, buying a car was a huge decision for the people, but now you can easily buy a car on a bank loan. Also, there is a rising competition between auto loan companies these days, which creates privileges like attractive rates of interests, minimum processing fees, and longer duration repayment facilities for car buyers.
However, before you head out to choose your favorite car model, make sure you contact a reliable auto dealership and spend a substantial amount of time researching to make the best decision.
Here are a few things you should keep in mind when applying for a car loan:
Shop Around for Comparison
In a competitive loan market, there are no standard rates. The rate of interest differs from fixed to variable and varies from lender to lender. Even if there is a slight difference, it impacts the overall amount you have to pay back to the lender.
Comparing the interest rates of various financial institutions and banks helps you in getting the rate of interest you desire.
Fulfill the Document Requirements
Financing a car loan is not as easy as it seems. You are required to complete all your documentation accurately and get them verified along with your current credit score to get the final approval.
Some of the important documents you need to take care of are income proof, bank statement, valid address proof, identity proof, etc. Having all these documents speeds up your application process and gets you a pre-approval.
Choose a Shorter Loan Repayment Tenure
Dedicating a fraction of your monthly expenses towards EMI or car loan instalments requires a stable income. These costs have to be incurred for months and maybe years to come. So, it is essential to consider the loan repayment tenure before getting influenced by the deals.
A five-year loan period may sound appealing to you, but when you calculate the total amount, you will be left in splits. So, always go for minimum loan repayment duration to save the most money.
Calculate the Final Price
You will see various advertisements of loan companies claiming to offer the cheapest interest rates in the market, but when looked in carefully they charge huge amounts of processing fees, documentation costs, service tax, foreclosure penalties, and other similar charges. These drastically increase the total amount of loan that a borrower has to pay back to the lender.
Hence, as an astute customer, always confirm for such aspects and check the final amount you have to pay over the period.