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5 tips to consider when applying for your car loan

Gone are the days where a four-wheeler was considered as a luxury. Today, it stands as a symbol of essentially for most individuals as they travel to and fro from work. But while the car has become a solution for those who want to save up on time and resources, one inevitable factor remains. That is, how to financially afford the car?

Does one save up on one’s disposable income? Can one borrow from close friends or family? While these may be variable choices, the ideal choice lies in the car loan. With this loan, you can easily get access to funds to purchase the vehicle, along with the added essential and insurance. Furthermore, you can also easily repay back the loan in installments, over a fixed tenure of 10 to 15 years, which is ample amount of time for any loan repayments.

But like any other loan, the process to apply for a car loan will require certain considerations. After all, a loan is a debt that must be carefully considered, lest it turns into a lifelong repayment. Here are a few tips you can consider when it comes to applying for the car loan in India:

Tip #1 – Explore options: You must first shop around for the car loan like you would do with any other purchase. As there are plenty of banks and financial institutes that offer this loan with different rates, shopping around will give you an opportunity to consider all your options. You can approach the financial institute or even a car dealership to get an idea of what to expect in your loan for a car purchase.

Tip #2 – Nail down your research: Take your time to learn about the car – financial industry. Research about the loan rates on the open market. Know your financial history, and determine the deal you would get. If you take the time to understand the current scenario, you will know the appropriate time to apply for a car loan and get the best deal.

Tip #3 – Get your credit report: It is best to arm yourself with your credit report before you negotiate for a car loan in India. If you are aware of how good your credit score is, you will be able to push your lender to offer some concessions.

Tip #4 – Consider old models: Most of the dealerships are determined to get the older models sold before the new models hit the market. If these dealerships are tied up with the bank you consider for a loan, you will be able to pull off a better deal and complete the deal in-house with the right strategy.

Tip #5 – Know the brief terms: Don’t be convinced you’re getting the better deal with lower monthly payments, especially on longer loan terms. You must consider the overall annual rate you’ll end up paying. If you can’t, calculate the effective interest rate, ask the loan provider to explain it to you.

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