Are you tired of using public transport daily and planning to buy a new car or you are bored of using your old car and looking for an upgrade to a reliable model. Before you plan to apply for a car loan there are few key points you should consider to ensure that you are secure with your auto loan option.
Here are 5 points you should consider before choosing a car loan:-
1 . Down Payment
First and most important thing to consider is the down payment terms. This is the amount you will have to pay through your own resources. But make sure you try to pay the maximum down payment for your car, so the dependency on loan is reduced. Hence you don’t land up paying more interest.
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- Interest Rates
The interest rates of a car loan depends on the tenurity you’ve chosen, and the loan amount you have taken. The lower the interest rates the better it is, however if possible opt for floating rate of interest so that if the interest rate goes down, you tend to benefit from it.
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- Festive Offers & discounts
Choose festive offers and discounts that are available. You can surely benefit on the price or the interest rates. Sometimes their offer includes clubbing of the insurance with the loan taken.
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- Credit Score
This is nothing to get surprise off, but before going for a car loan your previous debt needs to be clear or it could harm your car loan application. If you have loans it would be a good idea to establish some credit before applying for the loan. But in case you have a low score then it indicates that you have not been able to keep up with your payments in the past.
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- Duration of Commitment
Do not opt for long term payment just for the sake of lower EMIs, as the longer you pay the more you tend to pay. So EMI may be smaller, but in that smaller EMI the major part will be interest pay and hence you tend to pay more in the long run then the amount you have borrowed.
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