For most people, purchasing a car is an exciting event as it is often their first significant purchase. If you’re looking for financing advice, here are some helpful car loan tips for your vehicle purchase.
Check your loan eligibility before you select your car
While your heart may be set on the latest car model, make sure to check your loan eligibility first. This is because lenders will check your eligibility before offering you a loan amount.
Begin by reviewing your credit score. Aim for a credit score of 750 or higher as it will get you a comfortable loan tenure and affordable interest rates. If you are a student with a limited income source, ask your family member with a good credit score to co-sign the loan with you for a better deal.
Give equal attention to loan tenure and EMI amount
While a car offers convenience and utility, its value only depreciates over time. So, while a longer loan term might not affect your monthly expenses, you may want to sell the car before your loan tenure is over. In such a case, we suggest you opt for a shorter-term rather than a longer one. Because while the EMI amount may seem higher initially, you will save on interest payment in the long run.
Students may consider purchasing a pre-owned car. As it not only costs less but also provides plenty of opportunities to upgrade later. Besides, if you’re hesitant about obtaining a loan to buy the car, you’ll be relieved to know many lenders offer a used car loan for up to 95% of the car value.
Additional Read: Tips to make used car loan application process easy
Do thorough research on the car’s MSRP
MSRP is short for the manufacturer’s suggested retail price. MSRP is the amount the manufacturer receives from the dealership in exchange for the vehicle. Knowing the MSRP will give you a bargaining chip while negotiating the final price of your car. A good tip is to settle on a price that is 5% less than your budget. This will help cover any additional cost, such as insurance, warranty, accessories, etc.
Ask for quotations from multiple loan providers
Whether you’re seeking financing for a new car or a pre-owned one, make sure to check with different lenders. You can compare the various terms and conditions offered to zero in on a suitable lender. For students purchasing a pre-owned vehicle, investing some time into research will help you secure a favourable loan deal at an attractive used car loan interest rate.
Additional Read: Steps to Apply for a Used Car Loan Online
Not sure where to begin your car loan journey? Visit the Tata Capital website and find out everything you need to know about car finance!
Besides quick processing, competitive interest rates, and flexible EMI options, you will get top quality car loan advice from our advisors. We offer a flexible tenure for a loan amount of up to Rs. 50 lakhs. If you are unsure about what loan tenure to choose, we have a used car loan calculator to help you with the details.
So, take advantage of our simple application process and apply today!