Car Loan Repayment Tenure: If you are going to buy a car for yourself, and the car is slightly above your budget. So in such a situation you can take the help of loan against car. You should never be in a hurry while taking a car loan. You should take care of many important things. In this news, we are going to tell you about the precautions while taking a car loan from a bank or any financial company. Also what is the repayment tenure. You must keep these things in mind.
Choose loan according to your income
If your income is good, then you will not face any problem in repaying the loan amount. If you repay the loan on time, it becomes a lot easier for the lending financial institutions to assess your eligibility and disburse the loan quickly.
How to reduce your EMI
Car loans are mostly available for a tenure of 3 to 5 years. Some banks give loans for 7 years. In such a situation, when the tenure of the loan is long, its installment (EMI) gets reduced. If you take a loan for a longer tenure, you have to pay more interest. The older the car, the less it will cost. It is not wise to take a loan for this long tenure.
can take loan
You pay a higher EMI for taking a car loan for a shorter tenure. There are many types of conditions on a car loan. Some banks give loans equal to the ex-showroom price of the car, while some banks give loans only up to 80 percent. While taking a car loan, other charges have to be seen along with the interest rate and processing fee.
improve credit score
You need to check your credit score while applying for the loan. If your credit score is 750 or above. So the bank or financial institution can give you a good loan. A good credit score reduces the risk of the financial institution losing money after the loan is issued to you. If your credit score is good, then you will get the loan in less time.
What is repayment tenure
The repayment tenure of a car loan is an important link. Long term loans are chosen to raise funds. So the monthly installment ie EMI will be less in paying it. More interest will have to be deposited on this loan. On the other hand, if a short term loan is chosen, then the monthly installment amount has to be paid more. In this situation, the loan has to be repaid quickly. If you opt for a car loan with a shorter tenure, the lending financial institutions offer lower interest rates on the same.
How to choose loan amount
You need to be careful while choosing the loan amount to avoid financial burden and repayment issues. Higher the loan amount, higher will be the monthly installment repayment amount. You should keep your loan tenure longer to avoid paying higher installment amounts.
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