Please Tell Us Your City

location icon
    location iconClose
      Sorry!! No Matching Results found. Try Again.

      Why Should You Pay Down Your Debt Before Financing A Car

      CarTrade Editorial Team

      CarTrade Editorial Team

      The Indian automobile market is inundated at present by a variety of car financing companies, which offer loans at lucrative rates of interest. Presently, almost every auto dealership indulges in offering vehicle financing at flexible rates and schemes. A considerable amount of buyers also tend to go for car finance as it helps them to keep a check on their life savings. People planning to buy car in India can enquire about these loan rates through the financial companies or the corporate banks. At present, car loan in India has become a necessity for the common buyers as they get the leverage to spend their income in bits and parts, without much of a hassle.

      Why should you pay down your debt before financing a car
      Why should you pay down your debt before financing a car

      Although the car financing tool is considered to be a boon for vehicle buyers, obtaining it does not seem to be an easy task at all. Car loan in India is offered by large financial groups as well as small corporate firms, which are scattered all over the country. This car finance requires the fulfilment of certain conditions by the buyer, among which is the clearance of any pending debt. One of the important aspects to achieve a highly flexible car financing scheme is to get rid of any previous loan or debt. Most of the financing firms keep a track of an individual's credit score throughout his/her entire life. Having a bad credit score might result in the person not getting the best of the car finance deals.

      To obtain car loan in India at best rates, a person needs to make sure that his credit score is sufficient to make him eligible for auto finance. During the processing of any auto loan application, the concerned firms keep a check on the credit score of the borrower. This score only decides the loan to value ratio, which is the ratio of total sum financed against the actual value of the car. During the final stages of loan processing, the finance firm will also track down the payment history of the borrower for previous debt repayment, amount owed, credit lines, credit type used and total credit duration. After measuring all these figures, the firm will decide as to what is correct loan amount to be given to the borrower.

      Most of the borrowers know the answer to the question of how to finance for a car but hardly a few posses the knowledge about picking up the correct scheme. When the borrower is aware of his/her credit history, then the same can be used to bargain for a more suitable and flexible financing scheme. In case a person has a debt pending on his name and wants to finance for a newly-purchased car, he/she can ask for s credit score report from his previous lender. There are also several methods through which a bad credit score can be turned into decent numbers and the same can be enquired through a variety of financing firms.

      Latest News and Expert Reviews