Top five tips – Applying for car finance

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These days owning a car is a necessity, not a luxury due to the improved standard of living that has changed many people’s lifestyle. However, the fact is that many individuals face is the difficulty in affording a car due to the lack of funds. If you are going for a used car then you can acquire a used car loan that provides you with the capability to negotiate on the price of the car. As the procedure for the application of used car loan is little different, most lenders may not have this facility, but you can find out the best banks that do through doing some research on the web.

Now focusing on the process that is involved in applying for car finance:-

I. Inspect the lender: This will be the first step of applying for car finance, where you need to examine the different banks available and their proposals. Assure that you know all the details regarding the lender’s operations and all the benefits associated with the finance. Pick up the best one for your vehicle and also your budget, so that you won’t face any kind of burden in paying back the loan. It was noticed that certain people have become the victims of fake lenders, who took all their money and disappeared in no time; to avoid such tragedies you need to be alert and inspect the lender in detail so that you rectify any of your doubts.

II. Accumulate necessary documents: Following the finalization of your lender, the next step would be to gather the essential credentials that will be asked for by the lender. These may include your proof of identity, income proof, and residence proof and also there may be a requirement to produce the income tax (IT) proof with your salary slips and bank statements. Some lenders may also require your passport details, driving license and other relevant evidence; but this varies amongst different banks.

III. Analyze the interest rates: Most lenders try to bluff the borrowers by offering low interest rates, because of which many people become victims. It has been noticed that the main reason for using underhand techniques is due to people’s uninformed idea that only the monthly payments are evaluated and this results in higher interest rates, longer repayment duration and a huge down payment. So it is vital that you analyse the entire loan agenda, including the length of the loan repayment, rate of interest, any benefits included and the down payment amount.

IV. Unfasten the transactions: It is recommended that you ask your banker to individually stipulate all the actions that you have to make, such as the car price, financing terms and conditions, trade-in values, process of getting used car loans and other relevant details, as it is very easy to get confused if you don’t break them down and analyze them thoroughly.

V. Think of the consequences: Rectify all your doubts and ascertain the consequences that could arise if you are unable to pay back the minimum monthly amount. And also know what has to be done to overcome any hurdles and penalties that you will be charged. You can take a financial adviser’s suggestions so that you won’t go through such tough times and organize things respectively. Also design yourself a financial plan in such a manner that won’t perplex you.

Author bio: Simon John Clark. My passion is to write on Finance, Insurance, Travel, Home Improvement and Home appliances, you can reach me @financeport.


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