Car loans have made buying a car easier even for financially weak individuals. By taking a vehicle loan you can pay the cost of the vehicles through Equated Monthly Installments (EMI). Thus you may not have the pressure over financing the entire value of the car while buying it. It actually means that the lender or the bank will pay the amount for buying a car. The buyer is subjected to payback the principal amount along with the interest rate periodically over a couple of months to gain entire ownership over his car.
Availing a car loan has its own benefits and drawbacks. So it is your responsibility to check for various financial factors and the pros and cons, before getting finance from a bank for a car.
Advantages of getting a car loan
- The first and the foremost benefit is that you need not pay the whole on road cost of the car while you buy it. Hence even if your budget is quiet low, you may be able to buy a car.
- You may get discounts over your car loans or interest rates under certain circumstances. So you will always get a chance of paying a smaller value of monthly installments.
- The features offered by your back will make the process of buying a car simple, since the lender will hold control of the buying procedures and you will simply have to be informed about the interest rates and the EMI.
Disadvantages of getting a car loan
- Sometimes you end up paying higher rate of interest, thus at the end you would have paid a sum quiet larger than the actual value of the car.
- You are required to make a down payment, in the form of either cash or a trade in.
- If you are unable to pay your monthly installment, there is a possibility of your car being ceased by the lender.
Recommended Read :
- How to Apply for a Car Loan?
- What is the Car Loan Eligibility?
- Car Loan Eligibility - Important Points
- 7 Factors That Make Car Loan Simple
- Advantages of Car Loan
- Pros and Cons - Car Loan
- Smart ways to Reduce Car Loan EMI
- How to get Loan for a Used Car?
- Why Used Car Loan Interests Higher than New Car Loan?
- Car Loans in India
Taking out a car loan, I think, is always a difficult decision. It’s the trade off between having what you would like at the time you would like it and paying a larger value for something. When you pay the larger value for something you also find a much lesser return when the care goes for re-sale. BUT car loans are particularly important should you need a car for, say, a new job which will create you a larger income.