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Take Your First Car Home With The Help Of These Car Loans Tips

Take Your First Car Home With The Help Of These Car Loans Tips

Since the very first car rolled out on the streets, cars have gone through tremendous transformation in the form of power, comfort, safety, fuel efficiency, interiors, and exteriors.

Today, cars are the most common form of transportation and have become a compulsion rather than a requirement. Besides being a compulsory vehicle for office and household works, cars have made traveling less hectic and more convenient. There are cars for the super rich and there are cars for a daily commute. There are cars designed and developed for every purpose. You can buy whatever car you like, but only if you have enough bank balance to do so. If you are concerned finances will keep your first car out of reach, you need not worry. There are easy finance options available to buy your preferred car.

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Want to know the whole process?

There are many loan companies, as well as dealers, that have tie-ups with money-lending companies to make the car buying process easy for people who do not have hard cash available. Car loans are the easiest ones to obtain because there is no compulsion to provide income proof, credit scores, asset proof, employment status, insurance, bank statement, etc. as automobile lenders know that not every person meet all the qualifications. All in all, getting a car loan is less painful than a home loan or business loan.

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Having a helping hand in terms of an easy car loan has made it possible for people to afford a new car. Here are some insights about how to get the best car loan that you must consider.

What loan amount are you eligible for?

In general terms, the car loan depends on the actual cost of the car, in addition with down payment from your side that you can invest from your pocket. And also with the amount, you can conveniently pay for the monthly repayments. So, all you have to do is to look at your monthly budget, and the savings, so that lenders can figure out the base to lend you the loan for your car purchase.

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What type of loan can you opt for?

There are different types of easy car loans to help you opt for the best-suited loan type that meets all your requirements. The four most important ones are a variable loan, a fixed loan, a secured loan, and an unsecured loan.

  • Variable loan: In this type of loan, the loan amount varies as per the interest rate adopted by the lender. If they lower the interest rate, the repayment also decreases, and vice versa. But these interest rates are always lower than fixed rates.
  • Fixed loan: As the name suggests, the interest rate is fixed for the complete loan tenure. The monthly loan repayment remains the same irrespective of the market rates.
  • Secured loan: This loan is more like a bet because it means that you put your desired car at risk. If you don’t repay the loan amount on time, the lender will take back the car. In this loan, the car is used as an asset.
  • Unsecured loan: With unsecured loans, there is no compulsion of putting the car at risk, but you have to prove that you are capable of repaying the loan amount on time by showing your credit repayment history or credit card history.

What car brand do you want to buy?

The type of car brand you buy depends on whether you are opting for a new car or if you have selected a used car. For new car loans, refer to the above-mentioned loan types to get a better idea of the kind of loan that works for your budget, lifestyle, and overall financial plans. For used cars, you first have to see whether the car is not too old to pass the car loan eligibility.

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What special features are you looking for?

There is an array of various features attached to a car loan, all of which should be considered before purchasing the car you want. Some of these special features include:

  • Additional repayment: This loan feature allows you to make additional repayments of your car loan and save money by making complete loan repayment sooner.
  • No early repayment penalty: This loan feature allows you to pay off your complete car loan when you have excess money without getting penalized or charged a higher interest rate for early repayment.

You have gone through the types of loans, eligibility, and special features of car loans available to you, now all you have to do is make a final checklist of documents you will need to make the car buying process less painful. Keep your identification documents, proof of income, car details (if you are using it as security for a loan), and credit history record, to see your repayment capability.

Having all these documents on file will help you clear the car buying process and get you in your first car without any additional hassle.

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Erick Clifford

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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