The story is not so different in the case of house makers. When the husbands are busy in the office and the women have to take charge of the home from dropping off or picking up children from schools to taking care of the aging family members they might need a vehicle for transportation. While doing multiple hats women also require to be on the move on a constant basis. And, in that sense being independent, be it in terms of driving or decision making, goes a long way. Over the years, the number of women drivers has risen to almost double the amount but still, there is a long way to go.
Buying a car may seem like a financial burden to an individual but that isn’t the case, especially for women borrowers. Non-banking financial companies (NBFCs) and banks offer a lower rate of interest and the best Car Loan offers to women.
Applying for a car loan is one of the easiest steps that requires minimum effort. What can be difficult is the repayment of the loan. Thus, before applying one should the Car Loan Eligibility criteria which can reduce the chance of rejection. For this one can use a car loan eligibility calculator to compute one’s ideal loan amount. Once this is done one can choose one of the four EMI options in order to avoid the four EMI options to avoid any financial stress.
Fixed EMI: This is a regular EMI loan repayment option where the rate of interest is fixed and calculated equally for the entire tenure. This has the lowest rate of interest out of all the options and one can pay either at the beginning of the month or in the end depending on one’s condition.
Step-up EMI: This is another great option if one does not intend to take up too much financial stress in the first year after purchasing one’s car. The EMI is the lowest in the first year and then it gradually increases with each passing year. So as one’s income increases through increments or bonuses, so does the EMI.
Balloon EMI: This option is quite similar to a Step-Up EMI payment process. One can choose to pay a lump sum amount of up to 20% of the principal amount towards the end of the repayment tenure to reduce financial stress in the beginning.
Step-Down EMI: This EMI option is quite the opposite of the Step-Up EMI where the interest charged at the beginning is much higher and gradually decreases. While the rate of interest is consecutively high, the total interest outgo is significantly less as the principal amount is to be paid back quickly.
Further, there are a few steps that are to be followed before applying for a car loan:
- One should always use an online Car Loan eligibility tool in order to figure out if one can qualify for the loan.
- One should decide on a loan amount and stick to it as flexibility in this decision is not an asset.
- Before taking a loan option one should compare between different loan providers to figure out which one suits them best.
- One should not blindly choose the lowest EMI offer and take into account the total interest payout at first.
- One should always use a car loan EMI calculator to figure out the tenure and an EMI payout that one is comfortable with.
In conclusion, there are the following things that one should keep in mind before going for a longer repayment period that will increase one’s total payment amount as he or she will keep on paying interest for the entire duration. If an individual opts for a lower EMI then the final amount will increase as a lower EMI translates to a longer term of repayment tenure i.e. higher total interest payouts.