The author is Founder, IndiaLends
Cars are no longer a necessity in today's world; they have become a status symbol instead. Today, not only does every family member want their own car, but he/she also wants the most attractive models with the latest features. To make matters worse, with the New Delhi Government “traffic control” policy - You now need two cars for different days of the week! That said automobile and fuel prices are also expected to increase in future, making it more difficult for the average consumer to purchase and maintain cars.
So how do you meet this increasing need for owning a car? Opt for a car loan if you don’t have upfront cash. Car loans offer numerous benefits to consumers who want to purchase a car. First, they give consumers the flexibility to choose a loan repayment option that best suits their lifestyles. Second, taking a car loan is easy and quick - the documentation and approval process takes just a few minutes, and the loan disbursal happens in 2 days. Third, consumers can apply and get a loan even if they have a bad credit score – lenders keep the car as security to cover for the risk of non-payment.
If you are new to applying for a car loan, here are four tips to help you finance your dream car:
1. Budget all your car expenses before applying:
Find out how much money needs to be paid as EMIs before deciding on a loan. Keep in mind the additional costs such as gas, maintenance expenses, insurance premium, and taxes while estimating your budget.
2. Check your Credit Score before applying:
Always check your credit score before applying for a loan. Having a high credit score allows you to negotiate better interest rates as well as avoid rejections.
3. Find a co-applicant to apply with:
Apply for a joint loan with a family member or spouse. This improves your creditworthiness and helps you get bigger loan amounts at low interest rates.
4. Include accessories in your loan deal:
Seek out lenders who finance accessories besides the factory features at no additional cost. This makes your deal even more attractive and allows you to get more value on the same deal.
A car is the second most expensive purchase you make after your home, and you should make the decision wisely and judiciously. Look at all the financial options available to make the best buying decision.