Smart tips to pay off your car loan faster

Car Loan Rates EMI 2017 8391 views

After fulfilling your dream of buying your favourite car, you begin to start making payments of EMIs towards the loan. Couple of years later, you could find the loan highly unbearable and thus you would start searching of an individual who could take over your car loan. But to your utter dismay, you may not find anyone. You then could go on to various car websites to find a prospective buyer for your car. Then again you may fail to find any interested buyer, thus raising your concerns. But you need not to worry as there are some tips that can help you pay off your car loan quickly. So get smarter and follow the tips below.

Make additional payment

You can enhance your normal EMI payment by an amount affordable to you. Let’s suppose your EMI payment comes out to be Rs 15,000. What you can do here is by making Rs 1,000-2,000 extra payment towards each month’s EMI to reduce the burden of your car loan significantly. It may also happen that your monthly EMIs would be around Rs 12,280. You can then pay off a round figure of Rs 13,000 without making a deep hole into your pocket. In this way, you can pay off an additional payment of Rs 8,640 towards your EMI and thus cut down your loan tenure and the interest outgo that results from longer repayment period.

Prepayment

You can make a bigger payment or say prepayment of the loan from the yearly bonuses you could receive in a year. Many banks and non-banking finance companies (NBFCs), through special tie ups, can allow you to avail this option. If you have a good CIBIL score, you can then approach your lender for allowing you to make such big payment. But before availing such option, do make sure to know from your lender if it can result in any penalty. There are a clutch of banks charging and not charging on prepayment of the car loan.

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Choose the car according to your affordability

Assess your affordability before choosing the car model. For example-when you can afford Ford Figo in your budget, you must buy it instead of purchasing Benz A Class that could be beyond your reach.

Keep a lid on the expenses

Make effective financial plans keeping in mind expenses like rent, electricity, food, etc and the incomes you have. Always ensure to keep your incomes much ahead of the expenses so that you can pay off your car loan much faster.

Taking extra work

You can always earn extra money if you have the talent. Let’s suppose if you are a prolific writer or a good web designer, then you can use such talents to maximize your earning and thus pay off your car loan easily and quickly. There are many companies looking for writers, designers, SEO executives who can work from home. But before going ahead with the option, always ensure to check the public review regarding such companies online.