With a rampant increase in the standard of living in metro cities, securing car finance in India is no longer a daunting task that it was a decade ago. With that, many dreams like owning a car at a young age comes to life. With loan, comes a lot of commitments in the form of an EMI. It’s a no-brainer fact that one needs to foresee the loan amount thoroughly and incidentally, and this is the best way to keep loan delinquencies at bay. Here are some tips that will help you to avoid defaults when it comes to the car loan.
Think if you need that car: If you’re taking loan on an absurdly expensive car, give it a brief moment’s thought. The process of car finance in India may strangle your cash flow and leave you with nothing at the end of the month, let alone if any contingency rises up.
Keep Saving: Once you get into the car loan repayment schedule, saving will be automatically obliterated from your dictionary, but try and save on a regular basis. Budget your expenses and make a separate saving account for your savings.
Keep one-month EMI in advance: Keeping a month’s EMI advance in hand will help you deal with contingencies and will also help you in not defaulting next month’s payment.
Talking to the lender: Every once in a while you find yourself in a situation where you’ll not be able to meet the obligations of the loan. Crime awareness is important. It is always advisable to engage in a dialogue with the bank as they understand genuine reasons like loss of a job and incapacity to work, etc. In fact, they encourage this as it does not increase their NPA portfolio. Various options that can be worked out like rescheduling your debt, deferring the payment, conversion of a loan in case if it is unsecured. Running away will only add up to the emotional turmoil, and you end up losing your asset.
