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A 5-Step Guide to Getting Your First Car Loan

Once you have decided to purchase a car, the most important thing is to compile all the available car loans. Accumulating funds required to buy the car you like would be one of the primary parameters that you would need to consider. Hence, it is important that you have adequate knowledge of all the terms and conditions regarding your loan before you avail one for yourself.  Car loans can be helpful in financing a new or a second-hand car or even for refinancing a car debt.

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Here are a few factors to consider before getting a car loan:

1.Check your Credit Rating

Checking your budget, credit rating, and reviewing your current financial record/position is a first step to get prepared for car loan application. Getting a car loan and its applicable interest rate would be directly impacted by your credit score – higher the score, the better.

2.Conduct a Thorough Research

Researching and being informed about all the available alternatives is a good practice when you are availing a car loan. Make sure you compare the interest rates as well as other benefits that you could get from different lenders.

3.Use a Car Loan EMI Calculator

Before applying for a car loan, you can use a car loan calculator to evaluate how much you would be paying. A car loan EMI calculator can be found online on websites of some of the banks that will help you evaluate the amount you would be paying in monthly instalments.

4.Prefer Banks over Dealers

When you are looking to apply for a car loan, it is better to visit banks rather than relying on automobile companies. You will be able to discuss the available options and select one that is most suitable. Dealers can also act as agencies providing car loans however they may charge you a higher car loan interest rate as compared to banks.

5.Pay Higher Down Payment

Down payment helps you get a better idea about the amount you would be paying in the long run. Your down payment will also be the decisive factor in setting up your loan tenure and your EMI amount. Make sure to pay a higher down payment, so that you can save money by paying lesser instalments with lower car loan interest rates.

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