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Auto Financing- An...

August 08, 2014 08:05

If you are planning to buy a car in the near future, then you can do it in two ways; cash mode or car financing. You can hardly find any youngster who wants to block lakhs of rupees to buy a car, as there are many other lucrative options available in the market that they can use to multiply their money. That is the main reason they look for auto financing procedure than cash mode.

If you want to buy a new car through car loan, then you have to first pay a pre-specified amount as down the payment. Once you pay down the payment, then rest of the amount is divided into equal monthly installments that you can pay over a period of few years. It is a confusing situation as people may find it difficult to decide the duration of installments in case of car finance. It may be a tricky situation for you, so you should decide the duration of your car finance on the basis of your salary and monthly expenditures. In other words, car finance duration is inversely proportional to the monthly expenses. The more your monthly expenses, the less you can contribute towards your car loan installment. The less you can contribute towards your car loan installment, the more will be the interest rate and duration of the installment, but lesser burden on you on a monthly basis.

You should clarify everything at the time of car finance initiation to avoid any confusion at a later stage. Although you should keep in mind that all the companies try to offer you the best car financing deal. It is advisable to do your calculations well in advance, so that you don't have to face any problem afterwards. The average interest rates that people used to pay a decade back were way lesser than the ones people pay today. Hence you should keep your car finance installments' duration in a balanced situation. You can take help of any of your friends or any financial consultant for this purpose.

When you take help of any professional in regard with the duration of your car financing procedure, then he can tell you exactly how long you should carry your installments. These day's companies provide finance ranging from three years to five years. So whenever you decide to buy a car, do a proper analysis and then opt for an ideal car financing option which suits your budget, as well as your needs in a proper way.

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