Buying a new car is a momentous occasion in India. Your car can be a mark of success and stability. Therefore, people tend to put in a lot of thought while selecting their desired four-wheeler. However, picking the correct car loan for your car is just as important as choosing the best vehicle. Here is a look at things you should consider before taking a new car loan.
1. The amount you need to borrow
Just because you are about to purchase a new car, does not mean you should borrow as much as you want. While most car financers will offer up to 90-95 per cent of the vehicle’s price as a loan, you need to be smart while deciding the sum to borrow. You should only apply for as much of a loan as you are comfortable repaying. Keep in mind that lower loan amount will result in smaller equated monthly instalments (EMIs).
2. Rate of interest
Before you apply for a new car loan, check the rate of interest that the lender is charging on the lent sum. Once you determine the rate of interest, you can use the same to calculate the monthly payments you would need to make. Online car loan EMI calculators can help you make such calculations and comparisons. Choose the interest rate that you are most comfortable with before borrowing from the lender.
3. Documents required
Before you apply for a new car loan, check what documents are required to get the loan sanctioned. Make sure you have all the necessary documents so that the entire process becomes much simpler and streamlined. If you cannot ascertain what documents would be necessary, ask the lender to clarify the same.
4. Tenure for repayment
Car loans may have flexible repayment tenures ranging between 1 and 7 years. You must make sure to pick a tenure that you are comfortable with. Keep in mind that longer tenures would mean lower monthly instalments, but greater interest payable overall. Therefore, if you think you would be able to repay the money in two years, make sure you pick a loan that allows you to repay it within that time so that you can limit interest payments.
The new car loan application is simple and does not require any collateral, as the car you purchase is the collateral in this case. However, keep the factors mentioned above in mind to get the best loan for buying your dream vehicle.
1. The amount you need to borrow
Just because you are about to purchase a new car, does not mean you should borrow as much as you want. While most car financers will offer up to 90-95 per cent of the vehicle’s price as a loan, you need to be smart while deciding the sum to borrow. You should only apply for as much of a loan as you are comfortable repaying. Keep in mind that lower loan amount will result in smaller equated monthly instalments (EMIs).
2. Rate of interest
Before you apply for a new car loan, check the rate of interest that the lender is charging on the lent sum. Once you determine the rate of interest, you can use the same to calculate the monthly payments you would need to make. Online car loan EMI calculators can help you make such calculations and comparisons. Choose the interest rate that you are most comfortable with before borrowing from the lender.
3. Documents required
Before you apply for a new car loan, check what documents are required to get the loan sanctioned. Make sure you have all the necessary documents so that the entire process becomes much simpler and streamlined. If you cannot ascertain what documents would be necessary, ask the lender to clarify the same.
4. Tenure for repayment
Car loans may have flexible repayment tenures ranging between 1 and 7 years. You must make sure to pick a tenure that you are comfortable with. Keep in mind that longer tenures would mean lower monthly instalments, but greater interest payable overall. Therefore, if you think you would be able to repay the money in two years, make sure you pick a loan that allows you to repay it within that time so that you can limit interest payments.
The new car loan application is simple and does not require any collateral, as the car you purchase is the collateral in this case. However, keep the factors mentioned above in mind to get the best loan for buying your dream vehicle.
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