Buying a car with limited funds

September 12, 2023
DD Planet

It is easier these days to buy a car with limited funds since there are a lot of financing options available to us. However, choosing the best auto loan is another headache.

Here are the tips and advice to help you purchase a car on loan:

1. Know your loan limit in advance. You can easily get it checked online or from the bank where you hold your basic savings account.
2. Work out how much loan you need. If you’re extremely short of funds for making a down payment, choose the financier that offers you the maximum loan.
3. Choose a loan amount that fits your income. Do not go for a higher amount just because you’re eligible for it and the bank is offering you.
4. If you’ve any pre-approved loan that comes along with your relationship with a bank or another financier, do not go with it blindly. Know all the related charges and the interest component.
5. You need to check for the processing fee, prepayment charges (if any), interest rate and the tenure of the loan.
6. Choose a minimum tenure that fits your income. However, in the case of a car loan, if the tenure is exceeding seven years, better go for a lesser amount of loan or some other car that fits your budget.
7. Shortlist the financiers that accommodate all what you want and then make a comparison among them for the charges, service and the interest rate etc.
8. After you’ve finalised the financier, be ready with all the documents.
9. Do not forget to avail and compare the discounts and offers from the car sellers that they provide you when you go for an auto loan.