If you don’t have a lot of responsibility right now then you might not realize this but your needs are more likely to increase exponentially than your income. But if you know that for sure you are going to able to pay back the debt in time without overburdening your finances then taking a loan is that bad of an option. Even though you have savings you can invest them in a high-interest rate savings account and make more money to pay back the installments in time rather than using up all your savings at once.
Taking a loan rather than using all your saved-up money is also helpful in case of an emergency. If you have an emergency right after making a huge purchase by using all your saved money then you will regret not keeping anything aside for rainy days. If you fit into this category of people then getting a top-up loan is not a bad idea.
Remember everybody has different financial conditions and you are the only person who knows about all your financial difficulties. So while making your decisions do all the research and then decide if this scenario will sit right with your finances or not. So if you have decided on getting a top-up loan then there are some things which you should look into.
So there are some options when it comes to a top-up loan. If you have an existing home loan that generally goes on for a lot longer than any other loan then banks do have some schemes for you. This happens to a lot of people and banks have made some provisions on getting a top-up on home loans. Property is a solid asset whose value increases over time so rather than cars banks prefer to give you a top-up on home loans rather than car loans. Banks give home loan top-ups with just an added interest rate of 0.5 to 1%.
Although you do need to be skeptical about getting a car loan top up. If you want to get a new car rather than having to continue with an old one or you have bought a second-hand car whatever maybe the reason unlike homes cars lose their value over time. You don’t want to end up paying more money to the bank than the value of the car that you get to drive.
Banks do provide top-ups to the home loans but that is not the case with car loans. With a car loan, top-ups banks are well aware that a car loses its value over time so they know that if you are unable to pay back the loan they might not be able to procure loan costs by selling your car. So banks will charge a higher interest rate on top of your previous one and this makes you pay a lot more money to the bank than the principal amount.
Indian bank car loan provides interest rates of 9.65% for car loans. They provide loans from 5 lakh to 15 lakh and with a tenure of 2 years to 7 years.
Buying a car can make your life way easier with a fast and secure traveling option just sitting outside of your house all the time. Don’t forget to calculate the petrol and diesel costs along with the car maintenance costs when you are calculating your car loan EMI. if you only calculate the EMI and not these costs then you might end up overburdened with all these costs on a monthly basis.
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