Having your own car brings with it innumerable joys, is a matter of pride and convenience, and marks the beginning of exciting new journeys. Buying a car has become easier now, as car loanproducts are being offered by various banks and financial institutions. One of the major advantages of getting a car loan is that you do not have to use your savings to buy your dream car. Plus, you get the option to pay in easy monthly EMIs. A car loan also protects you from financial uncertainties. However, not all car loan products are created equal. For optimal gains, you need to choose the best car loan. Here are some key things to consider before applying for your car loan.
Check car loan eligibility
Each bank has its own terms and conditions for car loan eligibility. Generally, the car loan eligibility will be based on your annual income and your profile such as salariedindividual, self-employed individual, priority customer, etc.This is the first step that will allow you to shortlist all the car loan products that you are eligible for.
Evaluate features and benefits
Some of the must-have car loan features and benefits are as follows:
Max loan value: You need to choose a car loan that is offering maximum loan value and affordable interest rates. This will reduce the amount of your down payment and monthly EMIs.
Minimal processing fees: You need to find a car loan that offers minimal processing fees. Make sure there is nothing in the fine print that may force you to pay additional fees and charges.
Flexible loan duration: A good car loan product will allow you to choose the tenure of your car loan. For example, if you want to pay off your car loan in 12 months, the lender should be willing to accept this. The same should be true in case you want your car loan duration to be five years or more. Flexible loan duration will allow you to plan as per your available budget and future financial needs.
Special rewards: With increased competition, various banks are offering special rewards to theircustomers when they apply for a car loan. Considering all other variables to be equal, you could choose a car loan product that may be offering the best rewards program.
Clearly defined rules for loan default: Future is uncertain. There’s always a risk that you may encounter financial problems and may not be able to pay your car loan EMIs. Your car loan provider should have clearly defined terms and conditions for loan defaults. The rules pertaining to a loan default should be favorable and designed to reduce your financial risks. It should provide you the option for making an honorable exit.
Having your own car can unlock a new lifestyle and will be the reason for joy and happiness for the entire family. Taking a car loan is a wise decision since it protects your existing savings and ensures that the EMIs are paid from your future income. You need to choose a car loan that offers most of the features and benefits as described above. Selecting the best car loan will ensure a smooth ride by safeguarding your financial health.