If you are dreaming of buying a new car but the budget is less than ₹ 10 lakh, then you do not have to worry about how to finance it with so much money. With the right information and planning, you can not only buy a car but also manage the EMI comfortably. Today we will tell you such easy and effective ways which will make the process of car finance very easy for you. Let’s know about it in detail.
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Decide Your Budget and Needs
First of all, you have to decide how much you can spend on the car. In this, you should include the cost of on-road price, insurance, registration and accessories. There are many great hatchbacks, sedans and compact SUVs available in the budget of less than ₹ 10 lakh. By setting the right budget, the burden of EMI will be less and it will be easy to repay the loan.
Prepare for the down payment
Before taking car finance, try to pay at least 20-30% of the amount as a down payment. This will reduce the loan amount and also save on interest. For example, if the car costs ₹9 lakh and you pay ₹2.5 lakh down payment, you will only have to take a loan of ₹6.5 lakh.
Comparison of loan options and interest rates
Every bank and NBFC (non-banking financial company) has different interest rates and terms. Compare different loan offers and choose the option with the lowest interest rate. A lower interest rate means your monthly EMI will be lower and the loan will end sooner.
Use EMI calculator
The EMI calculator helps you plan your budget properly. By entering the loan amount, interest rate and tenure, you can know how much EMI you will have to pay every month. Try that the EMI should not exceed 30-40% of your monthly income.
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Keep the documents ready in advance
For a car loan, you need important documents like identity card, address proof, income proof, bank statement and photo. Keeping them ready in advance will reduce the time of loan approval.