Buying a four-wheeler of your own may be a well-thought-out plan or a lifelong dream, but is a decision that must be taken carefully. For starters, most car owners in India prefer to purchase a car with loans as a financing option. A new Car Loan can be a great financing alternative for those who wish to buy a car but lack funds. However, be careful when applying for a loan as even a small mistake can lead to application rejection. 

If you’re not sure where to start, this blog will help you with all the steps required. We’ll help you take all the measures to reduce the Car Loan percentage for your EMIs. Let’s get started!

How to get a new Car Loan?

1. Research financial lenders: Start your journey to buying a new car by looking up your financing options. Which lenders have the best offers and benefits on vehicular loans? Run a bank-wise comparison of the interest rates, fees, and repayment terms to make an informed choice.
2. Apply for a loan: Once you have decided upon a car that fits your budget and requirement, start with the formalities. This will give you a fair idea about the interest rate, loan amount available, and any discounts from the car dealer.
3. Gather your documents: As applicants, you need to submit some documents to the lender to get a Car Loan in India. These include your ID proof, address proof, income proof, and bank statements.
4. Submit the loan application: Go to the preferred lender’s website and fill out their Car Loan application with all the necessary documents attached.
5. Wait for the loan approval: After submission, the loan manager will assess your application. They will verify it and then approve and disburse the loan, if all conditions are met. Read the fine print carefully as borrowers will have to sign a loan agreement to finalise the details.
6. Purchase your car: Once the loan has been approved and finalised, you can buy the car of your dreams with the downpayment and loan amount.

Things to be mindful of while applying for a Car Loan

1. Timing your purchases well: Banks and lenders often offer lower interest rates during the festive season. Hence, purchase a new car during the festive season to save money on interest.
2. Save up for a downpayment: Experts suggest putting down at least 20% of the car’s purchase price as a downpayment. This can help you get a lower interest rate and avoid being upside down on your loan.
3. Maintain a good credit score: Your credit score plays a critical role in determining your Car Loan interest rate. This includes paying off any debts, clearing outstanding dues, and paying your bills on time.
4. Set a realistic budget: Setting a realistic budget is crucial when it comes to getting a Car Loan. Determine how much you can afford to borrow and repay without stretching your finances too thin.
5. Get pre-approved: Having a pre-approved offer ensures that you know exactly what percentage of the total price the bank is willing to cover. 

What is the best time to buy a new car in India?

1. Festivals: Car manufacturers and dealers often offer discounts and special deals during festivals like Diwali, New Year, Christmas, and Gudi Padwa among others. 
2. Public holidays: Dealerships may offer promotional deals on public holidays to attract customers. Thus, plan to buy a car during public holidays like Independence Day or Republic Day.
3. October to December: The stock clearing season in showrooms can give you better discounts. Dealerships often offer discounts to clear out inventory before the end of the year to make way for new models.
4. Sale season: Many dealerships offer sales to attract more customers. Thus, be on the lookout for advertisements and promotional events to get the best deal on a new car.
5. Month-end or year-end: Dealerships have sales targets to achieve, which push them to provide extra discounts and better deals during this period.

Mistakes to Avoid

While getting a new Car Loan in India, there are some common mistakes to avoid. 

1. Inconsistent income: Car Loan lenders consider your income when evaluating your loan application. Therefore, having an inconsistent income can negatively impact your chances of getting approved for a Car Loan. Make sure you have a stable income source before applying for a loan.
2. Low creditworthiness: It is advised to work on improving your credit score before applying for a Car Loan. Since banks check your creditworthiness in their vetting process, there is a chance for the application to be rejected if you haven’t paid previous EMIs on time, have outstanding credit card bills, or have poor spending streaks.
3. Improper paperwork: If you have missing documentation, inconsistent paperwork, or gaps in the application, your loan plea would be rejected by the bank. So do make sure that you have all the necessary documents available in advance.
4. Not checking if the car ensures value for money: Don’t make the mistake of purchasing a car without doing proper research. Make sure the car you are purchasing is worth the money and meets your requirements. Think about factors like fuel efficiency, resale value, depreciation, and maintenance costs before making your purchase.

Conclusion

An expert tip while buying your car is to calculate all the expenses associated with owning a vehicle along with setting your budget and repayment plan. In addition to new Car Loan payments, think about insurance, fuel costs, routine servicing and maintenance, repairs, as well as taxes. This will create a realistic picture for you and ensure you make a sound financial decision. 

So what are you waiting for? Get started with your loan applications today!

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Hi I am Hamza Zia, an experienced and professional article writer and guest blogging outreach business expert.

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