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Necessary points to keep in mind before applying for a Car Loan

Buying a vehicle is the dream of every person. Most people save money so they can buy their dream home or car. However, saving money is not enough because the prices of the vehicles are high so the option is left is to take a loan. Today a large number of people believe in taking the vehicle on loan instead of paying cash. However, there are some things to remember before taking a car on loan. 

Compare interest rate:  

Before taking a car loan, compare the interest rates offered by different banks or finance companies. Since there is no fixed standard rate of auto loan in the market, but it is also true that a slight difference in the rate of interest is found which will have a big impact on the EMI you give. Each car dealer has a tie-up with a company offering different finances. Therefore, it is very important to evaluate while choosing the lender or bank.

Keep documents complete:  

Each loan institution follows KYC (Know Your Customer) norms. With which your credit record is also checked. Keep all your papers complete before shopping for a car. This will not only save your time. Rather, when you move forward with the loan process, you will find it easier to negotiate for more add-ons or lower fees.

Don’t get into a long-term cycle:  

The most important part of a car loan is the repayment terms. Some loan lending officers can impress you by giving you the option of a particular time period which you may find attractive. For example, you may be given a small EMI amount for a tenure of seven years. But if you take a pay period of seven years, and calculate the total payment, it may bother you. So try to avoid taking Lone for a long period of time.

Keep these things in mind: 

After finalizing the loan amount, calculate your EMI. These days many financial websites provide easy EMI calculators which can help you to build your monthly EMI based on the interest rate. This will help you decide on a better interest rate and loan for the car. Also look for processing fees as the fees of different financial institutions are different. Also, take a look at the foreclosure charge of your loan. Most buyers do not pay attention to the foreclosure charge, which can cause problems later. 

 

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