9 Tips To Manage A Car Loan

By BankBazaar | May 25, 2016

Car Loan

When you decide to finally buy the car of your dreams, you’re already bubbling up with so much excitement that it becomes slightly difficult to focus on other important details involved in the process. Managing your Car Loan is one of them. To make the process of getting a Car Loan and repaying it successfully slightly easy, you first need to choose the right loan, keeping all the necessary details and requirements in mind.

Here are a few tips to manage your Car Loan well:

  • Try making a huge down payment

This trick applies to every type of loan. If you have some free cash elsewhere and you’re planning to get a Car Loan, try using your savings to make a huge down payment. Arranging some free cash and making a huge down payment sure sounds a bit difficult, but it can tremendously reduce the need to get a huge loan; and that’s a relief! As a result, you won’t have to pay huge EMIs, taking a big burden off your shoulders.

  • Choose your car smartly

Although you’d want to go for your dream car, think twice if that’s feasible at the moment. Keep all your financial obligations and other debts or EMIs in mind and then decide if buying a really expensive car makes sense for you. If you think you can manage it well, go for it. Otherwise, just consider going for a cheaper alternative till you’re able to afford a luxury car.

  • Opt for a shorter tenure

The shorter the tenure, the lesser is the rate of interest. Try your best to go for a short-period loan. That will mean that you need to pay more as the monthly instalment, but it also means that you’ll be able to save a lot of interest on the loan. It, therefore, is the smarter way to handle your loan.

  • Think it over

Although you get the liberty to pay back in instalments, if you already have a lot of financial commitments, maybe you should rethink this loan. You don’t want to burden yourself, do you?

  • Don’t miss any EMI payments

Try and stick to paying your EMIs regularly. If you miss out on a few of them, your bank might declare you a defaulter. This will create problems for you in future, making it difficult for your loan applications to get approved.

  • Make a plan and follow it

To pay any loan back, you need to manage your expenses well. A great way of doing this is by making a monthly budget and sticking to it. It’ll help you get in a better position, financially.

  • Think about refinancing the loan

You can always consider refinancing the loan. It basically means that you get to pay off an existing loan with the proceeds from a new loan. Both loans are generally of the same amount. This can help reduce the term of a longer loan or facilitate a switch between a fixed-rate and an adjustable-rate loan.

  • See if debt consolidation works for you

There are chances that you’re paying some other debts in addition to this Car Loan. With debt consolidation, you can take out one big loan and pay off everything else using it. This way, you get freedom from paying so many debts and hence, it becomes easier to keep a track of them.

  • In case you default on a payment, talk to the bank

If you miss one or two EMI payments due to some other financial obligations, don’t worry! Banks generally don’t declare you a defaulter until you miss quite a few of the monthly instalments. But in case you think you won’t be able to pay an upcoming EMI, talk to your bank and explain the situation.

Now, we hope that managing a Car Loan will be a cakewalk for you, go ahead, get your dream car!

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Category: Buying a car Car Loans

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6 thoughts on “9 Tips To Manage A Car Loan

  1. Alice J Marti

    Incredible Tips to manage the car loan. These are really helpful for me in getting the car loan. Happy to get these tips. Keep sharing the stuff like that. Thanks for sharing.

    Reply
    1. Team BankBazaar

      Hi Alice, We’re glad you found this useful. Keep reading our blog for more insights into the world of finance. Cheers, Team BankBazaar

      Reply
  2. Emery Jean Chambers

    I think it will really be helpful to me if I followed your tip about setting up a monthly budget and sticking to it in order to pay off the car loan properly. I will be sure to do that since I am planning to loan a car very soon. This tip got my attention because I do not want to have a debt for a long time. Thank you for sharing the tips.

    Reply
    1. Team BankBazaar

      Hi Emery, You’re welcome. Keep reading our articles for more such tips. Cheers, Team BankBazaar

      Reply
  3. bad credit car finance Australia

    To manage your car loan run smoothly you must make huge amount of down payment so that it will be less requirement of loan to be borrow as huge amount of down payment you are going to pay and there will be less amount of interest will be to pay.

    Reply
    1. Team BankBazaar

      Hi bad credit car finance Australia, That’s true too! Thanks for stopping by. Cheers, Team BankBazaar

      Reply

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