Whether you’re a college student, a working professional, or a wanderlust, owning a car has to be a long-held desire. Driving against the wind and feeling your hands on the steering wheel of your own car still remains a dream for many. You might have even considered taking a car loan to live your dream. Even though taking a vehicle loan to own your dream vehicle is a feasible option, there might have been things that stopped you from taking that step. Not all of them need to be necessarily true, some of them might merely be widely circulated myths.
We’re here to bust some of those well-accepted myths so that you can take well-informed steps on financing your dream vehicle.
Myth 1: You need a high credit score
Yes, credit score is one of the main factors that banks look for when lending loans. But it’s not the sole criterion. It varies according to the lenders. Many lenders provide vehicle loans for an average credit score.
And for those who have no credit history, you can still get a vehicle loan if other factors like your income or revenue.
Myth 2: You can only get a loan for new vehicles
Since nowadays people prefer used cars over going for a brand new one, almost all lenders now provide loans for second-hand vehicles.
Myth 3: Paying cash is better than financing
Of course, when you look at the amount, paying in cash may seem a better option, since there is no need for extra payment for interest. But it wouldn’t be the smartest move from a financial perspective. Your bank will have a sudden financial void of the money that could’ve been used for investing in other options or for emergencies otherwise.
Myth 4: Choosing longer tenure for lower monthly payments
It might be tempting to take a longer tenure since you only have to pay lower monthly payments. But you’ll end up paying a much bigger amount as interest in the long run. So, choose a loan tenure according to your affordability rather than just blindly going for the longest tenure with the lowest interest rates.
Myth 5: Dealership financing is the best option
Taking a loan from the dealer may sound convenient. But there are a lot of banks and other financing options out there which offer much better features. Explore more options beyond your dealer and you may find something quite apt for your needs and budget.
Renowned banks like Karnataka Bank provide car finances for both new and used ones. If you’re thinking about buying a bike, there are also two-wheeler loans available. Financing your next vehicle is a convenient and financially smart option to live your dreams. Before making any decision, you have to do your own research to find the best deal for you.
Now that we’ve busted some common myths regarding a car loan, it’s time to take that step to drive your dream!