Money helps fulfil all the desires and aspirations. It would help if you spent it wisely and made the right investment decisions. We spend money buying a car, a house, jewellery, and other assets to re-invest to earn returns in the future.
You can also apply for a Car Loan from banks as a car is a necessity and a sign of prosperity. Before choosing a model and visiting the dealer to bring home your favourite car, spend some time analysing figures and preparing a set of questions. It is always beneficial to make informed financial decisions as they help you save for the future.
Questions you should ask
As you search for various Loan options online, you may encounter multiple questions about financing your dream car:
- What is the interest rate charged?
The first question that you should ask regarding Car Finance should be the interest rate that the bank would charge. Many banks offers Car Loan at low interest rates. If you have a Bank Account already, you can apply for Loans at relatively lower interest rates.
- What is the total amount that the bank can finance for the Loan?
You can pay around 20% of the car price on your own and get the rest of the amount financed. However, many banks also offer Loans up to 100% of the car’s ex-showroom price. The 20% rule states banks should not approve loans if they cost more than 20% of your monthly income in EMIs. Paying a higher EMI amount can strain your finances.
- What is the final price I pay for the vehicle?
Even if the interest rate is low, you can apply for the Loan while checking the final amount to pay towards it using the Car Loan EMI calculator. Consider various aspects like the principal Loan amount and tenure to get the lowest interest rate and save on the final car amount.
- What should my down payment and Loan tenure be?
Thoughtful financial planning is the key here. Choosing a lower EMI amount to repay with affordable Car Loan interest rates is safer. Choose a balanced EMI with a sensible tenure that does not pressure your earnings excessively.
- What are the fees included in the Loan?
Apart from the interest amount, you need to pay fees on the Auto Loan. Ask about the fees applicable while sanctioning the Loan and paying off the debt. Some of the most common charges include a Loan processing fee, credit report charges, documentation charges, registration certificate collection charges, foreclosure charges, Loan cancellation charges, part prepayment charges, and late payment charges.
Conclusion
Nowadays, cars are no longer a luxury but a necessity for most Indian families. Applying for Loans online can help you fulfil your dream of becoming a car owner without compromising your aspirations or spending a fortune to buy it.
