Earlier cars were once considered a luxury. However, today, they have become a necessity. Now, it is easier to buy a car, as there are many funding choices available.
If you are planning to buy a new or a pre-owned vehicle by taking a car loan, you should know about the interest rates and eligibility criteria. Here are five things that you should do for repaying your Equated Monthly Installments (EMIs) efficiently.
- Handle your money smartly
It is essential to manage your expenses wisely so that you should not feel the pressure of paying your EMIs. You can do this by controlling your expenses and spending your money sensibly. By doing this will inculcate a habit of savings. So, you can accumulate a corpus over time. Make a list of all your investments in instruments like equities, mutual funds, unit-linked insurance plans, and fixed deposits. If any of your investment is earning you a good return and is nearing maturity, you can use that money to prepay a part of your car finance. So, you can save a significant sum on the interest in the long run. However, before prepaying, check the charges levied by your financial institution.
- Keep the loan tenure short
A shorter loan duration means low-interest rates. However, the EMI will be substantial. By opting for a shorter period, you can save a large sum on the interest. Also, your financial liability will reduce, giving you peace of mind.
- Prepay a part of your loan
If you have a surplus amount in hand, you can prepay your car loan. This will lower the loan’s tenure. So, you can end up saving heavily on the interest. You can consult your lender and ask them about the process and charges of prepayment.
- Switch your loan to another financial provider
It is recommended to keep an eye on the interest rates of car loans. If you can find a lender who is offering a lower interest rate than your existing provider, you can move your loan to save money. Consider this option, only if you can get significantly lower interest rates.
- Do not miss paying your EMIs
Your credit score will get affected if you miss your EMIs. You may get a negative rating, and it can become difficult to obtain any type of loan in the future.
Now that you know how to repay your EMIs on time, apply for a car loan online. Mahindra Finance has a simple application process. You can determine the EMI with the car loan EMI calculator on the lender’s website. You can also check the car loan eligibility criteria over there.