Availing of a car loan is the easiest the bank or NBFC provides anyone who meets the eligibility criteria. But the real action comes after availing of a loan. The bank or NBFC expects the customer to have a healthy relationship with the bank or financial institute by paying off the debt properly. The monthly instalment shouldn’t be missed any month without difficulties.
Tips to handling the car loan.
Budget planning :-
The first and foremost thing a borrower should do after availing of the loan is making budgets. Plan your spending's according to your income. A loan helps you by not denting your account primarily at once. If the borrower is careless about his/her spending and fails to pay the interest amount each month, the denting is sure to come. Cut all your unnecessary expenses and condense your unwanted spending like excessive dress shopping, outing too often, high restaurant usage are all bound to make your debt repayment highly challenging.
Down payment :-
The bank or Non-Banking Financial Institution(NBFC) grants up to 90% of the car’s ex-showroom value for new car loans and 80% of the car’s on-road price for used car loans and loans against the vehicle. Some banks and NBFCs even offer 100% of the loan amount. But that doesn’t mean you should avail the entire price of the car on loan. It is most definitely better if the loan is only at the maximum of 80% of the car’s value. Financial advisors and economists highly pressure the borrowers to make a minimum of 20% of the value as a down payment. That way, the interest amount and the principal amount are less.
Tenure or Term of the car loan :-
The period you avail of the loan for is widely referred to as the tenure of the loan. Banks and NBFCs offer up to 7 years as the maximum limit to help the loan and one year as the minimum period for the loan. Tenure of the loan affects your ability to spend largely. A longer-term gives you a low-interest rate, and a shorter tenure gives you a high interest rate. But on the whole, at the end of tenure, people who choose long loan terms pay more interest amounts than people who prefer short assignments. If the period is short, you pay the debt off soon, and the sooner you can have the interest amount for other things. So shorter tenure is better to handle the loan slickly.
Loan resurrection :-
If you are unable to pay the monthly instalment on time, banks and NBFCs offer a loan resurrection where you can change the Car Loan interest rate and tenure according to your capability. There are even options to transfer your loan to another bank or NBFC. A loan moratorium is another offer where you don’t have to pay the interest amount for about three months. This is offered when you are facing terrible financial troubles like unemployment or losing business, but you should have paid the past interest amounts on time.
Debt consolidation :-
Debt consolidation, both literally and figuratively, means combine and conquer. If you have n-number of loan and it is highly challenging to pay the interest amount each month. Then debt consolidation is your best choice. Here you can combine all the debts to a single loan or credit with only one principal amount and one interest rate to pay every month. This way, you don’t need to remember all your payments and have a more than necessary headache.
Conclusion :-
PNB car loan offers the best deals in the nation, with billion account holders and countless others availing car loans day-after-day without complications. The bank’s online website can be used to know more about its interest rates and loan offers without having to move a step. As mentioned before, availing of the loan is easy, but paying off the debt is simulating, so you should always maintain the credit score and have a healthy banking relationship with your lender.
Also Read:- Car Advance For An Independently Employed Individual