MASTER CAR FINANCING
Essential tips to manage your car loan effectively:
LOAN TERM
- You can select a term ranging from 1 to 7 years.
- A longer term may ease short-term cash flow but accumulates more interest over time, potentially straining your finances.
- It's recommended to choose a term between 3 and 5 years.
DOWN PAYMENT
- While a typical down payment ranges from 10% - 20%, you can increase this if your finances allow.
- Your monthly payment (EMI) should not exceed 10% of monthly income, (20/10 rule).
HIDDEN FEES
- Ask the bank about all applicable fees, including those for documentation, processing, pre-closure, stamp duty, and late payments.
CAR VALUE
- Trading in your current vehicle may qualify you for additional offers and discounts on a new car purchase.
- Select a car within your budget, ensuring your monthly payments (EMI) adhere to the 10% rule.
CREDIT SCORE
- Keep a close eye on your credit score, as it's affected by credit inquiries from banks for products like credit cards and personal loans.
- Timely payments are crucial, as missed payments can significantly damage your credit score and lead to higher interest rates on future loans.
