Most people tend to follow the same routine while purchasing a new car; they research the car they want to buy, head to the dealership and test-drive the car, negotiate the price and then start discussing loans. While this may seem routine, it is not in your best interest. There is a better option that very people are aware of and even fewer tend to explore – getting a pre-approved car loan. Getting preapproved allows you to get the best possible loan deal and even expedites the entire process of purchasing the car. Here are four reasons why you should get a pre-approved car loan.
You can know how much you can borrow
When you opt for pre-approval on a car loan, you can find out just how much money you can borrow on loan. The amount could be more than you though, which can allow you to purchase a better car, or even less than you though, allowing you to revisit your finances. Your lender will also inform you of the preapproved maximum loan amount, which should cover all expenses such as accessories, on-road taxes, registration fees etc. If you are preapproved for a loan of ₹8,00,000; you should account for all these mandatory taxes and expenses and choose a car that covers all these miscellaneous costs.
You’ll know your interest rate and EMI
Getting a pre-approved car loan allows you to know, not just the cost of the car, but also the cost of the loan. So if you choose a car loan of ₹8,00,000/- with a tenure of 48 months, you would not just be paying a monthly EMI of ₹16,666/- but also an interest rate on it. Let’s say you opt for 8.5 per cent interest rate, then you would be paying a monthly EMI of ₹19,719/- Knowing the interest rate helps you figure out the actual payable EMI, which further allows you to plan your budget, before you book the car. You can easily calculate the EMI with the help of a car loan EMI calculator, freely available online.
You can choose a deal that works for you
Getting pre-approved for a car loans also gives you the freedom to choose from various dealerships. You can visit different auto dealers with your preapproved rates and don’t have to depend on your car dealer to help you find financing. What’s more you also have the upper hand when during negotiations.
You save a lot of time
When you get pre-approved for a car loan, you are walking into a dealership with an offer in hand. You only have to finalise your car. You can simply show the preapproved loan offer to the dealer and compare the deal offered by them. Irrespective of the fact that they can get you a better deal, you would be walking out with a deal you are comfortable with.
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