Research about cars which includes latest model, average, engine showroom visits, among other things, begins much before you buy your dream car. One goes into great details before finalising especially if the car needs to be purchased on loan.
The procedure to avail loan has become very simple with quick online approvals. But it is important to follow some basic steps. Here are a few things to keep in mind to get the best car loan deal.
After selecting the brand and model of the vehicle, one should decide on the down payment he or she is willing to make and the loan amount required. Now, check your eligibility for a loan. One can visit websites of different banks to check the eligibility and compare the loan interest rate.
Different banks offer different interests on loans and in order to attract customers, especially in these times of the pandemic, some banks are even providing additional offers on vehicle loans. One should explore the rate offered by finance companies and banks online to get a better deal. It is, however, ideal to visit the bank where you already have an account as the lender is more likely to offer better interest rate and loan amount. You may be required to submit some documents, including identity and income proof, before the loan amount is approved.
Banks check your credit report before approving your loan request. One must monitor the credit score at least six to eight months before applying for a loan as that buys enough time for you to improve it. Having a credit score of 750 is considered good and improves your chances of getting a better pre-approved loan.
It is also important to check the processing fee, which is generally around 2 percent or more of the entire loan amount. Experts recommend buying vehicles during the festive season as banks reduce and sometimes completely waive off the processing fee. One can save thousands of rupees as processing fee.
One should always enquire and opt for a loan with minimum foreclosure charges as there could be situations where an individual might want to foreclose the loan to reduce overall loan interest.
Always try to strike a balance between the EMIs and other monthly expenses. One should select EMI tenure that reduces your interest rate but it should not disturb other expenses.