Your first car is as special as your first love, if not more so, but the decision to choose a car loan EMI is usually difficult. However, the satisfaction of finally obtaining something you’ve always desired but never had is unparalleled and priceless. This is the reason why a large number of people opt for car loan EMI. Taking out a car loan is a major risk, and the EMIs must be paid on time for the drives to be stress-free. This is where you must maintain your composure and manage your monthly expenses and auto loan EMIs. If you’re buying a car on EMI, here’s a perfect guide to help you.
Cut Down Unnecessary Expenditures
The most fundamental and common-sense suggestion would be to eliminate unnecessary luxuries. It’s always fun to go shopping, purchase new things, and eat out, but when your car loan EMI is an inevitable expenditure, you need to reevaluate your priorities.
If you have a habit of overspending, this is the most critical factor to consider. To begin, establish a list of all the minor and large costs that you will need in the near future. After that, determine the surplus money that will be left over and make changes to your spending based on that. It’s important to stick with a proper plan when opting for car EMI.
Increase Your Income Sources
Now that you have a vehicle loan EMI to pay, it would be great if your income suddenly increased to cover your new obligations. However, in a perfect world, things do not operate in a way. So the only option left is to enhance your cash flow. This would require an increase in your disposable monthly income to balance off your auto loan EMI.
Turn off the investments that aren’t providing you with a solid return. Do your research and invest in options that provide returns of at least 10-15%; this can easily increase your monthly income by 10%. This extra cash can be used to pay off your car EMI.
Restructure Your Loan
If you are having issues with your current financial plan, you can modify your vehicle loan EMI. Banks change the EMI, loan payback period, and interest rate based on your willingness and ability to repay the loans. Furthermore, under some bank schemes, you can transfer your auto loan to any other bank ready to give a lower interest rate on your car loan EMI. After then, the remaining principal is transferred to the new bank, along with new car loan EMIs.
It’s important to be smart while changing banks for your car loan EMI. Switching banks frequently have an effect on your credit score. Furthermore, when you move banks, you must pay a nominal fee to your current bank, and moving banks is a time-consuming procedure.
Defer Your EMIs
Sometimes the issue isn’t that you can’t pay this amount; it’s that you don’t have the financial means to pay at all. If you are confident that your financial condition will improve in a few months and you will be able to pay your auto loan EMI, banks will provide you relief; this is your break-free period to find new strategies to raise your income stream. When this time period expires, your vehicle loan EMI will resume, but this time it will now contain Delayed Payment Charges, which are similar to a late penalty. It’s important to be careful when you defer your EMIs.
EMI Protector Add Ons
There are alternatives for integrating an EMI Protector plan into your vehicle loan EMIs or your car insurance coverage. The advantages are numerous, the most important of which is that if your car is totaled or damaged and the owner receives injuries and requires hospitalization beyond certain days, your EMIs will be partially reimbursed by your vehicle insurance company.
