How To Get The Right Car Loan

  Author: Naveen Kumar

If you are buying a car on a loan, you will have the option of choosing between banks and auto finance companies. Getting a loan at a dealership may be a faster but may not offer you the best interest rates.  Here are 4 things to do to get the right car loan. 

Firm up car brand and model

This is the first step in the search for the right car loan. While you would have a fair idea of this to begin with, test driving the short-listed vehicles will help you zero down on one model among a few you have in mind. Other factors like price and features will also play a significant role in choosing which variant you would like to go for.

Contact car dealer for the price

 Get the quotes from as many dealers as you can. Some dealers would be ready to give you a discount or extra accessories. At certain times of the year, off-season discounts are offered by car companies. Car makers may also provide additional discount to corporate employers. Enquire about special finance schemes. Also, get details of lending institutions with which these dealers have tied up for speedy car loan processing.  Taking a loan from these dealers makes the loan process a breeze.

Check out the best offer from lenders at dealerships

Check out with your car dealer the loan rates and other charges by different lenders. Since other charges are typically one time payments, it makes sense to take a decision based on the best rate offered. Your EMIs will depend on the tenure of the loan which can be 3 years, 5 years or 7 years. For a longer tenure, your EMI comes down but the amount of interest you end up paying is higher. The EMI amount is crucial because that amount will be deducted from your bank account every month. So make sure you go for an offer that you are comfortable with.

Check with other banks

 You can also scout for other lenders, especially PSU banks, for lower rates and prepayment flexibility. However, PSU banks may lag behind in loan processing. Check with your existing bank since it might offer concessions to its customers. Compare all such offers besides the offers at the dealer. Opt for one that seems to be the best.

Buying a car is major financial decision that you will be taking. Following the above will ensure that you get the car loan that suits you the best.