Everyone, at some point in their lives, might have dreamt about having a car, that their friends would kill for. Just like the dream job and dream home, a dream car also takes the prime spot in our bucket list. However, owning a car does not happen overnight. It requires effort, hard work and quite a lot of savings to put together all the money that is necessary to buy a car. Now, all things being said and done, it needs no mention that car loans are a rage these days and serves as one of the easiest and most lucrative options to own a car. Few filled forms, some verification process, and you are good to go. In a matter of few days, you shall be the proud owner of a car.
However, loans are always tricky, and should not be taken lightly. There are various legalities associated with loans, and it is supremely important that caution is adopted before applying for a car loan.
The article here aims to bring to the fore all that you need to know about car loans, what to be careful of and how to go about the entire process.
A short term loan is the best deal
The future is not in our hands, and we never know what could go wrong financially. Therefore, it is always advisable to go for a small principal amount and opt for shorter payment plans as far as possible. Shorter payment plans ensure that you do not have to pay higher interest rates, and thus, it does not really blow much of a hole in your pockets. It might also interest you to learn that car loans are usually available on a loan duration lasting until 7 long years. Choose your repayment plan wisely.
Check for payment offers by car dealers
Many of us would be totally ignorant to this, but know this for a fact that several car dealers and manufacturers have collaborations and tie-ups with banks. They have various loan offers and schemes that a direct car loan might not be able to offer. Therefore, do your research and check for better loan plans that these dealers have to offer. They might have lower interest rates and more convenient repayment packages.
Be careful of your budget constraint
Your EMI should fit your bill and never exceed your budget constraint. In a bid to own that grand car, do not make a false move and land yourself into a world of trouble. There is no point taking the plunge and then finding yourself in a dire situation. There is nothing more embarrassing and harassing than to see oneself not being able to afford the EMI. Therefore, dig around well for loan details before deciding anything.
Car loans or any kind of loans for that matter require caution and financial literacy. It is pretty easy for the banks to lure you into their grand loan schemes in an attempt to sell their service. However, the final call rests on you. It is you who should be able to decide and call the shots accordingly. Therefore, educate yourself before you apply for a car loan!