Car loans and financing schemes in India have become quite popular now with attractive deals rocking the festive seasons and additional perks as well as bonuses. Buying a car in India is like a dream come true for many with a number of car financing schemes available to buyers. If you possess a decent credit score, it’s relatively easy to find a good car loan offer. The good thing about car loans is that unlike other loans, they do not ask for financial well-being in terms of application submitted. However, with a larger number of offers in car financing schemes, many miss the fine print and succumb to the loan trap. Here are a few tips on how to avoid car finance traps and to secure a good deal.
Going for the first deal you come across:
A lot of car financiers in India advertise and offer mind-blowing loans to the purchasers. It is propagated through the common forms of media like television, radio and billboard advertisements, etc. Although these offers may seem to have very low interest rates, it is advisable not to go and sign a deal at the first look. Instead of going to that particular dealer, one should go and check out the market to approach the alternatives. Chances are high that you may find a better deal somewhere else.
Not reading the offer document thoroughly:
Car financiers in India are notorious in a way that they offer you too good to be true deals and quietly hide the crucial and the bad terms as fine print. These terms may prove very expensive for you when you are in the repayment phase, and default on payments may have exorbitant charges. One should understand that interest rate is not the only criteria on which you take a loan.
Using a co-applicant:
While applying for a loan, a lot of financiers will ask you to list down a co-signer or a co-applicant. However, it is not mandatory to have a co-applicant, but for the lender it means more security on the loan. Using a co-applicant will simply decrease your credit score and make it difficult for you to get loans in the future.
Discounts:
One should never stop asking questions when applying for a car finance. The dealer may have a lot of discounts for you that may lower the price of the loan. There are a lot of discount schemes for the military personnel, ex-servicemen, senior citizens, government employees and more. By not asking this, you are letting go of opportunities to lower the cost of the loan.
Biting more than you can chew:
This is the most committed blunder by car purchasers. They go out and shop for a car, and then decide, how to go about the financing. In such cases, people end up with expensive cars that are way out of their budget, making room for financial delinquency. By doing so, you go and select a car before truly analysing your financial situation. A wise choice will be to determine your financial well-being and then look for car financiers, analyse their rate of interest, your budget and then select a car.
