To begin with if you have decided on your car loan amounts that you can afford to pay back then you are on the right track
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Another important thing is to look for loan before you walk on to the car yard. This can put you in a better position to negotiate with dealer and at the same time you will not end up signing a car loan document wherein loan amount doesnt meet your needs or interest fees are high and inflexible.
Different Types of Car Loans
There are mainly two types of loans ie secured loan and unsecured loan. Usually Car loan is a secured loan.
With secured type of loan - lender has this security to keep the car until the loan is completely paid. This also gives lender an advantage to take back the car in case if borrower cannot repay the said loan amount. Whereas in unsecured loan this is not possible.
Select the loan term that suits you
The duration of car loan repayment can vary somewhere between 1 to 7 years. If you plan to repay the loan in the span of 1 year then your repayment will be high and interest amount will be less on the other hand if you plan to take up long term plan say for 7 years then your repayments will be lower but the interest amount would go up.
Use the Car Loan EMI Calculator which will assist you in determining the interest rate you would have to pay for the tenure you desire.
Car Loan Interest Rates
The most important factor to consider while taking car loan is to check for car loan interest rates. Usually the interest rate depend on type of bank / organization from where you are taking loan, type of loan secured/ unsecured, and your personal credit value. If your credit value is more then your ability for repaying it is higher and hence there are chances that you can get lower interest rate car loan.