When you decide to finally buy the car of your dreams, you’re already bubbling up with so much excitement that it becomes slightly difficult to focus on other important details involved in the process. Managing your Car Loan is one of them. To make the process of getting a Car Loan and repaying it successfully slightly easy, you first need to choose the right loan, keeping all the necessary details and requirements in mind.
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Here are a few tips to manage your Car Loan well:
- Try making a huge down payment
This trick applies to every type of loan. If you have some free cash elsewhere and you’re planning to get a Car Loan, try using your savings to make a huge down payment. Arranging some free cash and making a huge down payment sure sounds a bit difficult, but it can tremendously reduce the need to get a huge loan; and that’s a relief! As a result, you won’t have to pay huge EMIs, taking a big burden off your shoulders.
- Choose your car smartly
Although you’d want to go for your dream car, think twice if that’s feasible at the moment. Keep all your financial obligations and other debts or EMIs in mind and then decide if buying a really expensive car makes sense for you. If you think you can manage it well, go for it. Otherwise, just consider going for a cheaper alternative till you’re able to afford a luxury car.
- Opt for a shorter tenure
The shorter the tenure, the lesser is the rate of interest. Try your best to go for a short-period loan. That will mean that you need to pay more as the monthly instalment, but it also means that you’ll be able to save a lot of interest on the loan. It, therefore, is the smarter way to handle your loan.
- Think it over
Although you get the liberty to pay back in instalments, if you already have a lot of financial commitments, maybe you should rethink this loan. You don’t want to burden yourself, do you?
- Don’t miss any EMI payments
Try and stick to paying your EMIs regularly. If you miss out on a few of them, your bank might declare you a defaulter. This will create problems for you in future, making it difficult for your loan applications to get approved.
- Make a plan and follow it
To pay any loan back, you need to manage your expenses well. A great way of doing this is by making a monthly budget and sticking to it. It’ll help you get in a better position, financially.
- Think about refinancing the loan
You can always consider refinancing the loan. It basically means that you get to pay off an existing loan with the proceeds from a new loan. Both loans are generally of the same amount. This can help reduce the term of a longer loan or facilitate a switch between a fixed-rate and an adjustable-rate loan.
- See if debt consolidation works for you
There are chances that you’re paying some other debts in addition to this Car Loan. With debt consolidation, you can take out one big loan and pay off everything else using it. This way, you get freedom from paying so many debts and hence, it becomes easier to keep a track of them.
- In case you default on a payment, talk to the bank
If you miss one or two EMI payments due to some other financial obligations, don’t worry! Banks generally don’t declare you a defaulter until you miss quite a few of the monthly instalments. But in case you think you won’t be able to pay an upcoming EMI, talk to your bank and explain the situation.