Buying a car is decidedly on everyone’s bucket list. Before you buy a car you explore the different makes and models of various car brands available in the market. You might speak with family and friends, seek their reviews, even take a test drive or two and then cut down your list of car options to the one that you believe suits you the best.
With car loans it has become simpler to own a car. Car loans are one of the easiest type of, no hassle loans. Car dealers help you connect with a bank officer who would get all formalities done for you at the dealer’s office itself and you could walk out with your car the same day.
So, just because it is easy to get a car loan these days, should you grab the first deal in sight? No. Here are a few tips to make a note of before you apply for an auto loan.
By comparing car loan interest rate & other terms of agreement you can be certain of making a wise choice. For example, you just sign the papers with the first banker you bump into. There could be other lenders who are offering lower rate, lower processing fee, etc. But just because you skipped comparing their terms you missed out on an opportunity to save money.
Another important factor to consider is if you are giving a trade-in? Incase you have an old car that you would wish to trade-in then first check for its fair market value. Negotiate a good bargain with the dealer to take your car at a fair price and subsequently lower his offer price for the new car. This will help lower your ask for loan as your ultimate cost of vehicle would be lower.
Instead of looking at the EMI you would be paying, pay attention to the rate of interest you are being charged and the tenure of the loan. Ask for a shorter tenure. This will increase your EMI for sure but you will end up paying less in interest eventually and get rid of the debt faster.
Whether you are out looking for a loan or a car, settle for nothing short of best. Explore financing options, draft a realistic budget, get someone to co-borrow, self examine your credit report and consider all aspects of the loan. These are some vital tips for you before you take the next car loan.
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