For plenty of individuals, getting a loan to finance the purchase of a car can be tempting and easy. All you need is a steady employment and sufficient income to cover your loan payments, and before long, you will be enjoying a brand new car in no time.
No doubt, with plenty of options for car loans, you will be spoilt for choice. Additionally, you will need to consider the risks and downsides that come along with taking any of these auto loans. So, how can you take advantage of the car loan you will be borrowing? Here are a few tips you can consider before borrowing:
Terms of the loans: The rate of the car loans, like any other loans,are determined by several factors namely, your income and your ability to repay the loan amongst many others. In order to get the best car loan in India, you first need to see what all is offered by the lender, and what all can you afford. Consider your own job situation. Are you steady enough to hold a loan for a few months or a few years? Is your job volatile, that you can afford to hold a loan, let alone along with other debts? You also need to contemplate the fact that the value of cars typically depreciate faster than long-term loans are paid off. In this situation, you may not be able to break even, even if you have to sell off your car to finance the loan and added interest.
Maintenance and insurance costs: If you purchase a new car, you would be under warranty for several years. However, if you are purchasing a used car or even car loans that outlast than the warranty period, you need to take into consideration possible maintenance, repair and insurance costs. Your monthly loan payment will definitely be low, but to get a good idea; you will need to take in all the other expenses into account. Additionally, you will need to consider other options in the event that your car breaks down.
Commitment: The decision to purchase a car will go back to your current life situation and how dedicated you are to your current job and location. Even if the car payment is lower than the leasing of a car, getting out of a car loan will be a costly affair. So if you see yourself in a stable job, with no plans to relocate or switch jobs, you can shop around for a car loan in India that suits your needs. An exception to this situation will be sufficient cash payment. If you have sufficient physical cash, you can easily pay off the purchase without any hassle.