Posted by Admin
Owning a car today defines your social standing. Earlier, buying a car of your dreams used to be out of reach for most people; but nowadays, there are many of financial companies that offers car loans making the dream car purchasing easier for common people.
But Car Loans also come with a number of factors that one must consider before choosing the best provider for the Car Loan. Many people concentrate on finding the best deals for cars, so much so that they forget to pay attention to finding the best car loan. Here are some of the most common mistakes people make while choosing a Car Loan:-
Selecting Longer Loan Terms
In the excitement of purchasing new car and selecting best loan deal, one often tends to choose a longer period loan terms to pay the amount in a easier way having an ample amount of time to deposit money but one thing you are forgetting that when you chose a longer period term loan then your interest period and money also increases which results into a large amount of money. So wisely choose loan over a shorter period that reduces the interest amount and you need not to pay extra money to bank.
Focusing Solely on the EMI
There are a many loan options that promise for lower EMIs and for longer loan periods. But Just because the EMI sounds affordable, it does not mean that it will be cheaper in the long run. Always take a look at the bigger picture, and calculate the total money you will be paying back, at the end and if the interest seems reasonable. Never make the decision based only on the EMI.
Not Paying any Down Payment
If the option to get a new car without paying a single rupee seems too good to be true, it most probably due ti The “No Down Payment” option and is more like a “pay less now; but more later” deal. You pay zero down payments that bounds you to pay more on EMIs, which in the end means a higher amount of interest paid. Plus, people generally forget to factor in hidden charges and fees.
Heart over Mind
Mostly, when buying a new car, people have a set budget about the financing they need. The offers given make people consider spending ‘just a little more’ than their budget; which may cause undue stress in the future.
Not Doing Your Research
Before choosing your Car Loan, it is mandatory that you do the proper research. For the first time loan applicants, the process can be very confusing. It is important that you find the best deal for your car loan, but even more important is the fact that you know what a good deal looks like. There will be a lot of things commitments terms and conditions and it is important that you read all the documents their exact terms and what the loan things exact is and then sign the final documents.