5 Factors to consider for taking Car Loan EMI that suits your needs?

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The Process of finalising a Car

Buying a car is by no mean an easy feat. It can be an excruciating ordeal just to choose the car you want. But if you take it step by step, the long confusing process can become quite a cake walk. The first step is to set your objective in terms of the size of the car vis. A vis. number of family members, whether it is first or supplementary car, specific purpose for which you are buying the car etc. Now if you want a car specifically for city drive to take you from home to office, then buying an SUV would make no sense. Similarly if you want to take your car “trekking”, a sleek sedan would be definitely a foolish choice. Once you have decided this, move on to budget you have to spare for the car. Now most of the time the car that you want is always out of budget but with a number of good deals on car loans, you may find that your dream car is within your reach. Now that these two things are decided, it is time to find the cars within these requirements.

Picking a new or used car

Once you have made up your mind and chosen the wheels of your dream, shortlist dealer who gives the best deal on the car. It could be in form of a loan tie up with preferential rates, free goodies in form of car accessories, free initial services, gift etc. If you want to pick a used car, then consider number of kilometres it has run, years in use and the price tag.

As we mentioned earlier that with competitive rates and wide availability of car loans, one can buy any car which might be slightly out of reach presently. But picking a loan itself is a financial commitment which if not paid on time and according to terms and conditions can lead to imposition of hefty charges and penalties.

Factors to consider when picking car Loan EMI that suits your needs

Type of Loan

There are basically three types of loans- secured, unsecured, and simple interest loans. Secured loans are those that need an asset belonging to the borrower to be pledged with the lender. In case of default the lender takes possession of the asset thus pledged. Secured loans usually carry a little relaxed terms, conditions and interest rates as compared to unsecured loans. Simple interest loans have fluctuating EMIs computed on the outstanding unpaid amount of principal.

Opt for Flexi EMIs

Flexi EMIs are a great way of adjusting EMIs as per your future income. One can opt for Step up, step down, bullet or balloon flexi loan EMI. Step up EMI is for those who expect an increase in their income and thus can pay more EMIs later in the future thereby closing the loan as early as possible. On the other hand, step down EMIs suit those who want to pay high EMIs initially so that the interest liability reduces in the later phase of loan tenure. Bullet flexi EMI is a kind of arrangement where after making prepayment the EMIs are lowered. This is a great option for those who expect bulk cash flows once in a while. The last category of flexi loan schemes is Balloon category where the EMIs are small initially but expand during the last phase or end of the loan tenure.

Loan tenure

The tenure over which you want to repay the loan is another important consideration. Remember shorter the duration, lesser is the interest amount paid and vice versa. But again a shorter duration does lead to bigger EMIs. A car loan usually spans from five years to seven years, and can determine your financial commitment for the years to come.

Down payment

Down payment is the payment that a car buyer pays initially and is the minimum amount that borrower has to pay out of his or her own pocket. Usually every lender has a down payment policy wherein the amount of down payment to be made is defined as percentage of the cost of car being purchased. This actually is the first opportunity for the borrower to reduce interest cost as it reduces the amount of loan to be taken for purchasing the car.

Post Loan services

Post loan services like customer support are of paramount importance as they can make loan servicing a smooth sail. A borrower should have a reliable support for all queries enabling him or her to make timely EMI payments. There should be a ready helpline to clarify doubts regarding charges, statements etc.
If you have a car in mind then we have just the loan for you at www.letzbank.com. We have loans under numerous categories from the best names in the industry. You can compute the eligibility amount and apply for the loan. Our customer service is always ready and happy to help. So visit us today so that your dream car is no more a dream!

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