Not researching enough: As a car loan is a relatively more minor loan, customers do not pay attention to every detail of the terms and conditions of the loan, which can lead to unwanted complications and unnecessary high-cost charges in the long run. It is to be made sure that an individual calculates the cost of the loan, whether it is large or small before one applies for a loan. Doing market research will help an individual to avail the lowest rate of interests and best deals on car loan schemes and will also prevent one from facing any unpleasant surprises later on.
Being in a hurry to complete the procedure: As car loans are smaller than other loans like personal loans, customers are generally eager to finish the process quickly and rush through the stages of research work and comparison. This has negative consequences in terms of the cost of the loan scheme. By just finishing the procedure quickly does not mean that one will get good times; on the contrary, low EMIs does not necessarily mean that the loan repayment will be cheap. Similarly, the top listed websites in an online search do not always mean that they have the best products. Even though one may be in a hurry to choose the process, one will be saving money in the long term by spending some point of time to find the loan most suited for the borrower.
Presuming a small bank or NBFC will be suitable for a small car loan: This is always not the case and is another mistake to avoid. There are many such big banks that too offer car loans at competitive rates (like Axis bank car loan ) and can have a quicker and more efficient loan approval process. One should shop around for availing reasonable rates and terms and should not hold on to any pre-conceived notion about the size of the lender.
Not being careful about making repayments on time: This is one of the all-too-common occurrences. It does not matter if one’s loan amount is INR 5 lakh or 1 Crore. Every single late repayment is to be reported to the credit bureau by the lender. This will not only create an adverse effect on one’s credit health but will also hamper the ability of a borrower to secure bigger loans in the future. It is to be made sure that one makes every single payment on time and in total does not matter whatever the amount might be.
Not being thorough with documentation: Sometimes, customers are far less diligent about going through the documentation as it is a small amount. This is another significant mistake that one should avoid. Many times it happens that loan applications might get rejected because of faulty or incomplete documentation. Every rejection can decrease the credit score of an individual borrower and their ability to access more significant amounts of credit in the future.
Lastly, it is advised by senior members that comparing car loans and researching the market is very necessary in order to avail a good car loan scheme. One can make use of a car loan calculator to compare the interest rates and EMIs that one has to pay on a monthly basis. A borrower should not just select lenders based on an advertisement; instead, they should research in detail about the lenders and their reputation in the market.
Must Read:- Car Loans; Benefits that can be derived through the Efficient Functioning of the Car Loans
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