Cars are no longer a luxury. It is a commodity which is needed by most people across the globe. Apart from being a necessity, a car also seems to define your stand in the society. To keep up with the social standards and more importantly, for a convenient everyday commuting, people prefer purchasing a car. Previously, it was a task to get the financial assistance to buy your dream car. But nowadays, with the availability of so many financing options, it is much easier for people to avail the funds to purchase a car. The banks provide car loans, but they come with too many restrictions and conditions. So, nowadays, people prefer availing quick car loans from private lenders because it is much easier and convenient. Also, many private loan lenders provide options to apply and avail car loans online, which make it more a convenient and preferable choice.
Although there are many financing options that can be availed to purchase a car, ultimately, it is a financial contract. Many factors are considered by the loan lenders and financial institutions before the car loans are approved as it is a relatively bigger loan amount than a personal loan. Similarly, even the car buyers should consider many factors before finalizing a car purchase deal. However, many people concentrate on getting a good deal on the purchase instead of finding a proper car loan deal. The fact is that getting quick car loans are easy, but getting a good car loan is going to bring in more benefits to you. In this blog, we will study the 5 common mistakes which people should avoid while availing car loans.
1. Avoid Longer Loan Terms – People are usually under the impression that choosing longer loan repayment tenure will be more convenient as it will invite relatively lower installment amounts. But in reality, you will actually end up paying more in terms of the interest with the longer repayment tenure. So, it is better to choose a loan plan with the shortest possible term which is comfortable for you, so that you can reduce the interest outflow and save on the grand total.
2. Don’t Focus Only On The EMIs – Most loan seekers are always looking to avail deals with lower EMIs and longer tenures while taking car loans. People are under the misconception that having a lower EMI with an affordable repayment amount is convenient for them. But it is not going to be cheaper in the long run, as you will end up paying more interest rate every month for a longer period. It is important that you calculate the total amount you will be paying at the end of the term by including the interest rates and then make a decision considering the EMI amount, interest rates, and the total repayable amount.
3. Avoiding a Down Payment – Not paying a single penny now but still taking away a brand new car seems like a great deal. But not making a down-payment with car loans will only lead to paying more installment amounts down the lane. If you make zero down-payment, you will be paying more EMI that will come with more applicable interest rates, which will, in turn, become a more expensive affair if you do not pay a down-payment.
4. Not Choosing With Your Mind – Following your gut feelings is great when it comes to emotional things, but not when it comes to making financial decisions. When people choose to buy a car, they usually start the move with a fixed budget in mind. However, the sales team does their job well and make sure that the buyers are tempted to pitch in ‘just a little more’ to own some amazing features for their car. However, this could lead to unprepared financial stress later in the future.
5. Making Hasty Decisions – Before making any financial decision, it is imperative that you should research well and make a plan. Put your mind over your heart and choose a car that will ease your everyday life from all aspects. Explore well and select a reputable dealer who is trustworthy in the field. Understand all the terms well and if you have any doubts about the deal terms, ask the dealer and the financiers about it. Keep the whole process transparent and be clear with all the terms and preferences.
As the saying goes, all good things come to those who wait patiently. But, it is not so with the financial matters, especially while availing instant cash loans. When you are making a huge investment like a car loan, you should put in all your effort and make explore well to make the best possible deal. So, be sure of what mistakes you are doing and make sensible decisions before it is too late. At FriskyLoans, you will be connected with reliable lenders who will provide quick car loans online and, you can avail them easily to pay for your new car. Make sure you are clear with all the terms and repay on time.