While availing the loan facility for any autmobile, there is a dilemma in the buyer's mind as to how the repayment options are made more flexible. Car finance is being provided by a number of leading financial firms as well as corporate banks on various interest rates. These firms offer special discounts to certain group of people and their criteria for calculating the same is different. The current car buying trend, however involves paying less amounts on the spot and then people have to deal with heavy premiums in the later stages. It is a known fact that the car finance charges on any auto loan are directly dependent on the interest rate, loan amount and duration of loan. Making changes in any of these 3 aspects will lead to reduction in the car loan payments. There are a number of steps people can keep in mind to make their car loan repayment more flexible and these are:
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One can opt for using false circumstances, such as medical emergencies, unemployment and bankruptcy to get flexible loan repaying options from lenders. Once a person has given a valid proof of these conditions to the financing firm, them he/she can avail the benefits from the concerned authority.
- One can also calculate the DIR, which is the ratio of debt pending and the current salary amount of an individual. By calculating the DIR, people can analyse their capability of returning loan amount under the financial clauses through which they borrowed it.
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Tightening up the credit score with the concerned bank or financing firm also helps in reduction of auto loan payment. If one maintains a perfect credit score, then the bank can consider hi/her request to make changes in the current interest rate, thereby making it easy for the individual to repay the loan amount.
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Interestingly, the most reliable and common option for loan reduction is the auto refinancing option. The refinancing does not only lower the interest rates for an individual but also helps in clearing the pending debts pretty easily as well. People can pay their loan amounts way before the requisite duration while opting for refinancing option.
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While applying for the car loan, people can also make changes in the loan amount, interest rates and duration to create a flexible repayment plan for themselves. One should always calculate the exact amount of loan needed for the purchase of the car and then only make further decisions. It is generally advised to opt for loan in case the amount is higher and not if it is even half of the amount of the car.
- One should also make a note of the current interest rate and then determine the rate, which he/she can afford. People can make use of the auto calculator option provided by almost all of the banks and financing companies.
- Making a thorough research on the background, policies and schemes of various banks and financing firms is a must. People are advised to not just stop at the dealership and take all the decisions regarding loan options. One should use his/her mind in analysing the capability of returning the loan amount and what is the duration, which will be most suitable for the same. People can compare car loan schemes offered by various companies online or through a finance advisor, and then only make a final decision as per their suitability.
