Buying a car is arguably one of the most important decisions one makes in his/her life. And why not, it is generally the most expensive asset a person buys other than a house. Not just this, it also has an emotional element attached to it, very similar to a home. And it takes precedence over anything else if the buyer is a motoring enthusiast. A lot of car owners consider their cars as part of their family or like a friend who is always there with them through their thick and thin. Then, there are those who think of cars as a status symbol and would want to buy the best one out there. All these aspects of buying and owning a car have financial implications.
Cars of modern days, especially in our county, are very expensive items not just to buy but to own too and with people wanting to buy the best one possible within their means, it will always be difficult to make complete upfront payments comfortably. Luckily, to make this an easy affair, these days financial instruments like car loans are available which are accessible to majority of the population.
So, let us talk a little more about car loan…
Loan, as we all know is a sum of money that is expected to be paid back with interest. Thus, a car loan is a sum of money borrowed to buy a car and it is expected to be paid back with interest, over a stipulated duration. If you search online or read books, you will find that there are records which show that loans in general, are in prevalence for thousands of years now. But, this mode of securing finances became more common for the when the prices of cars shot up and they went out of reach of the common man.
Lot of critics might say it is not a good financial decision to buy a car on a loan as cars are a depreciating asset and loan entails payment of interest. Thinking this way will be just like looking at one face of a coin. Buying cars on loan has its advantages too such as not having to commit to one’s savings upfront. This money can then be utilized for other purposes like creating an emergency corpus or you can utilize it for purchasing other high value items like a house. One can also invest this money in some other avenues fetching returns much higher than the interest being charged for the car loan.
We are living in the times when purchasing a car loan is the easiest. There are many ways to ascertain one’s eligibility, easiest being to explore the financial institution’s website, and also to calculate the monthly outlay from one’s pocket to repay it. Not just this, it is also possible to choose durations and mode of repayment, like auto account debits etc., as per one’s need and preferences. Financial institutions have also designed tools like car loan EMI calculators which are easily accessible through their websites and can help in quick planning and calculation of how much EMI one will have to pay to purchase their dream car. Just enter minimal details and you have the results in front of you; no need to do number crunching and this also saves you from straining your brain. With minimum documentation and in a very short time, the loan can be made available, without causing any delay in the process of purchasing the car.
Car loans are making cars accessible to people who, in normal circumstances, would not have been able to buy one. Clearly, it is a boon since it helps you fulfill your dreams and sometimes necessities.