When should you apply For a Bank Loan to Buy a Car?

apply For a Bank Loan to Buy a Car?


Should You Take a Bank Loan to Buy a Car? There are many sides to this question and many opinions. However, based on your own priorities, future goals and current financial situation, the decision is ultimately yours. Experts recommend that you avoid situations where your car loan consumes 30-40% of your net monthly salary or income. This will leave you little room for other important loans or sudden credit, while at the same time leaving little room for savings.

apply For a Bank Loan to Buy a Car?
apply For a Bank Loan to Buy a Car?

At the same time, in an ideal situation, a car loan should be 10-15% of your total household income. Even if you qualify, it should ideally not exceed 20%. However, there is a silver lining here- with an increase in revenue; Your take-home salary will increase, car loan amount will become a small part of your monthly salary, which will give you more space for savings and investment. First calculate your mandatory expenses such as your monthly rent or home loan, food, electricity. Then, keep investing the last 10-12% of your income to appreciate and grow wealth and other ways. After all, what you have is your real breathing space for the loan.

In this case, you can plan to buy a car by allocating this part of your monthly income to pay EMI. However, you also have to plan for a down payment. You will not get a 100% car loan and even if you do, it will only lead to higher interest and in turn instantly lead to higher monthly EMIs. Therefore, try to recommend and pay at least 15-20% of the price of the car as your down payment. You should apply for a car loan only when you have this money saved and without interrupting your other savings, emergency fund etc. The car is depreciating assets with a resale value that will be significantly lower than the prices paid to acquire them. This way you should invest in something valuable to create a buffer when repaying a car loan.

Many people think that one should always buy a car in cash to avoid paying interest. This is a philosophy that many follow. However, for cars with higher prices, many feel it is avoidable because the car is depreciating assets and there is no point in locking a large amount of money into something that will not give you any compensation. As such, it is better to invest in additional capital investment avenues and other assets that will give you returns and with a regular monthly cash flow while serving a car loan periodically according to this ideology. Think carefully before applying for your car loan.

Why take a loan to buy a car is a good idea

It's easy to dream of buying your own car, but is it just as easy to turn that dream into reality? The answer is a resounding yes. You do not have to wait for years to collect enough money to buy a car and save every penny as banks are always there to help you get your dream car!

Banks offer attractive car loans in which you do not have to pay the full amount of the car to the dealer. You have to pay a certain amount of the total amount, while the remaining amount is paid by the bank as it gives you the loan amount. You do not have to repay this loan all at once. You can choose the favorable period in which you repay your loan in monthly installments. So why wait so long, when you can buy your desired car in minutes or days?

In addition, we are here to help you decide on your car loan by sharing some helpful details

1. Car model

One concern for consumers is whether the car they want is covered under a car loan. These days, most car loans are covered by banks. So, no need to worry about the car model.

2. Duration

If we take a loan to buy a car, we do not have to pay the full price of the car all at once. We can choose for different periods, in which we need to repay our loan. And this payment is made in installments for a fixed period of time. The loan repayment period is 1 to 5 years. So, you can choose your period according to your affordability.

3. Get your car loan online

Most of the banking facilities are now available on your mobile and internet. So to apply for a car loan, you do not have to go to the bank, as most of the formalities can be completed online without any hassle.

4. Another car loan?

If one of your worries is that if you buy a car on loan you will not be able to buy another car on loan, you need not worry. Now with AU Bank, you can buy another car on loan even with an existing car loan.

5. Credit scors

If we repay our car loan on time, we can also improve our CIBIL or credit score, which can help us, get credit on favorable terms in future.

6. More smart investment planning

The money you save by borrowing a car can be used in an emergency or a better investment plan can be made.

Now all you need to know is whether you are eligible to apply for a car loan or not. Let us help you with that.

A salaried person or someone who has a steady source of income is considered a good candidateIs coming

Your previous credit history should be satisfactory

You have a stable residence

So, if there are many advantages to buying a car on loan with such minimal prerequisites, why would you want to spend all your credit at once? So, don't wait any longer! Apply for a car loan now.

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