Many of us have a dream to buy a new car but when we consider income we pause it. Several car owners are often frustrated by the thought of buying a new car because of some concerns that they may not be allowed to borrow at a low income. It is not possible to get a car loan for a low income but some lenders may agree to give you a loan if you prepare your loan application with some care.
Listed below are the few things you need to keep in mind if you are buying a new car with your little earnings.
Car loan conditions for an employed individual:
Check your finance: It is a common idea to judge if you need a car and whether you can afford it with your own money or not. Remember not only the price of the car but you will also have to deal with other costs such as insurance registration and ongoing fuel and repair costs. Look at your current income and expenses then check if you can pay your EMI on time and all the other expenses or not.
Keep a check on your credit report: If you are planning to take a car loan from SBI Bank Car Loan conditions, you must have a very good credit score. Even if you earn less, lenders will look at your past payment history to see if you are a responsible borrower or not. If you have a sufficient credit limit, they may be persuaded to approve your loan.
Do your research: Before going to a bank to sign up for a car loan do your homework. If you take the time you can find great deals on used cars.
Don't be harsh on your pockets: You can save money for a while to buy a car. However, you need to be patient and dedicated.
Credit income ratio: Make sure you have a balance between your income and your expenses. Expenditure including current EMI should not exceed above 50% of your income. If your monthly withdrawal is more than 50%, lenders will consider that you will not be able to repay the loan.
Co-applicant: If you are low-income and do not have money to withdraw from the bank, you can ask someone else to be a loan guarantee provider. The guarantor or a co-applicant is legally obliged to repay the loan in the event of default.
Overpayment: If you have a low income you may need to pay a higher rate such as a small car loan as lenders are concerned that you may not be able to pay all the money you have paid. Start saving in advance so that you can pay your bills easily. It would be an advantage to get a very high payment as your interest rate on the reduced principal will be lower and you will have a lower EMI over the loan period.
Car loan conditions for an unemployed individual: Unemployed individuals can get money to buy a new or used car of their choice from bank, Non-Bank Finance Companies (NBFCs), a car dealer in India. Whether you are employed or not driving a car that is not roadworthy can lead to car accidents. It is best to change the car into a new car or a second hand.
Listed below are some of the tips on how can an employer individual get a car loan:
Source of income: Some lenders may approve your Car Loan application if you have another source of income such as a pension, disability income, interest income from the fixed deposit (FD), or any investment return.
Maintain a good credit score: Lenders do that applicants' credit rating and credit history to measure his or her creditworthiness. If you keep a good credit rating and a good credit history with outstanding fees or any debt files, lenders can approve your car loan application. 750 or more is considered a group good credit rating and if you want to improve your credit score you have to make EMI loan payments and credit bank payments on time.
Note: Early repayment of the loan before the expiry of its term overdue or delayed EMI payment and excessive borrowing can adversely affect your credit score. One way you can improve your credit score is to keep the balance between secured loans ( car, home, or gold loans) and unsecured loans ( personal loans).
Comentários