Applying for Car Loan? Make Sure You Avoid These 7 Big Mistakes

Most first-time car buyers either focus on the pricing of the car or on cracking a great deal. Exploring and analyzing available options for a new or used car loan is often the last thing on their list. But, if you don’t want that your dream car comes at a hefty price tag, be sure to steer clear of these 7 costly mistakes.

Opting for a Longer Tenure

Ideally, when people apply for car loan in India, they prefer spreading out their loan duration over a long-term. While this lowers the EMI, you ultimately end up paying more than what’s needed. Choosing for the shortest duration when you apply for car loan will enable you to save big on interest rates.

Hand Putting Money in Car Shaped Piggy Bank

Making EMI the Deciding Factor

Opting for a new or used car loan simply because the EMI sounds affordable to you is actually blinding you from the bigger picture. Calculate the interest you would be paying in total at the end of the loan term and make an informed decision.

Not Exploring other Options

The smartest thing to do when buying used car in India is to do your homework. While cracking a good deal is important, it is equally important to explore affordable financing options. So before you find your dream car, take the time and shop for the best new or used car loan options.

 Avoiding the Down Payment

If you think a no down payment deal is profitable, think again! Buying a new or used car with no down payment means a much higher closing cost. So be clever and bypass this mistake with a convenient credit line.

You can consider using MoneyTap’s convenient and cost-effective personal line of credit as a car loan. The entire loan application process can be completed online in minutes. You can then make the down payment and lower the amount of EMIs in future.

Ignoring the Credit Rating

Before you apply for car loan, check your credit score online. If you have a low credit score, your car loan will surely cost you more in terms of interest rate. Also, certain lenders may need you to pledge collateral. So be sure before you take the big leap.

Going with the Gut Feeling Alone

There are many instances when people get lured by sales talk despite having an ironclad limit. Attractive deals or tempting offers often entice people to grab the offer even if it comes at an extra cost. And sometimes, it is the excitement that makes you go overboard with your budget.

The gut feeling may not always be the best option for you. So test all your options before buying used car in India.

Opting for Dealer Finance

Going with dealer finance is definitely easy. But is it the best deal? It always makes sense to keep your options open when you apply for car loan. Don’t fall for dealer finance until and unless you know it’s your best bet.

Before you sign on the dotted line, read everything and avoid these 7 mistakes. Good things come to those who wait; but when it’s about a car loan, understand all the terms and conditions.