Asia's most magnificent motor show Auto Expo 2020, being held in the national capital, the world's biggest companies are launching more than one luxury vehicle. Equipped with sophisticated technology, unprecedented features, and luxury facilities, these cars come to the heart through the eyes in once glance. There is hardly anyone who does not feel that they should buy them. You can easily buy these expensive cars with auto loans. However, before going for an auto loan, the customers must take care of certain things. Let me tell you what those things are.
First and foremost, while taking an auto loan, keep in mind that your EMI is never as high as your monthly income, or else it will worsen your economic condition. Your EMI is something that does not prevent you from accomplishing your financial needs. The vehicle is a very expensive product, and its value declines over time. With the purchasing of the car from your showroom, the price starts to fall. Therefore, you should try to make your car loan payment in advance so that it does not affect your financial needs. If you already have a loan, it becomes very necessary for you to choose the car loan amount properly. Here you have to keep in mind how comfortable you can repay the loan in time.
To maintain financial stability, the customer should give at least 20% of the price of his car as a down payment. This will not exceed 80% of your car's price. For example, if you have chosen a ten lakh car, you should try not to pay less than two lakh as a down payment. This will not exceed 8 lakh of your loan amount. If your financial situation is not affected, you can also pay more as a down payment. You should try not to go for your car loan EMI for more than 10% of your in-hand salary. Because only car loans are not where you have to pay EMI. You may also have to spend on home loans, rents, insurance premiums, credit card repayments, investments, children's education, etc.
In the ideal situation, the repayment period of your car loan should not exceed more than four years. However, many lenders in India usually offer car loans with an eight-year repayment period. The amount of your EMI will definitely be reduced from the longer period, but this will significantly increase the interest upon you.
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