Driving or riding to work is often more convenient than taking public transport. Or landing your first job may mean you can finally buy a vehicle for your family’s convenience. However, lenders look at your financial stability before approving a loan; a first job may not yet establish that. Still, Loans for a new car or a two-wheeler are readily available with all the banks, NBFCs and other financial institutions.
Keep these factors in mind before applying for a loan
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Refurbished car from certified institutions
May such companies collaborate with various banks and financial institutions to take care of used car loans. But we highly recommend that you carefully opt for a second-hand vehicle and buy it from a genuine source.
Tenure and loan amount
The tenure and loan amount for buying a new or certified used vehicle often differ. It all depends on what kind of vehicle you choose—a brand-new SUV, a used sedan, or a hatchback.
Down payment
Make sure you have a handsome amount for a down payment, as it will reduce the loan amount, interest cost, and monthly payments. The amount of the down payment may also reduce the interest rate provided by your lender.
The vehicle will be collateral
You must also know that the vehicle you buy will also serve as collateral in case you cannot repay the loan amount.
The bottom line is you need to do offline and online market research with ample options available in the market these days. And, never miss an EMI as it can lead to a bad credit score which takes months, or even years, to get it back on track.
