If you have received a car loan from a particular lender, you will need to repay it in full over the chosen tenure or it can negatively impact your credit score. A low credit score can lead to loan and credit card rejections in the future, thereby, making the availing of credit products very difficult.
Good ways to pay off a car loan:
1. EMI stands for Equated Monthly Instalment. If you have taken a car loan, your lender would have fixed a certain amount that needs to be paid on a monthly basis in order to repay your loan in full over the chosen tenure. This EMI amount should be paid before a certain date every month (generally before the 10th of each month). This can help you pay off your car loan with ease.
2. If you have the entire outstanding loan amount in your hand and are looking to repay your loan in full to rid yourself of this financial burden sooner than the chosen tenure, you can then pre-close your car loan. This is beneficial if you make a lot of money suddenly and can afford to spend a lump of money to close your loan with ease. You can pay off your car loan with a pre-closure option.
3. If you have a certain amount of money to make one big payment, but not enough to pay the full outstanding car loan amount, then you can choose to make a part pre-payment on your car loan. This can help with reducing your EMI or your loan tenure. A part pre-payment is generally a minimum of three EMI payments. This can help reduce your financial burden sooner.
4. If you want to pay off your car loan immediately but do not have enough funds to do so, you can take a low interest loan such as a gold loan and use that loan amount to close your car loan. You can then repay the low interest loan with ease over the chosen tenure. You could also opt for a personal loan if the interest rate is lower than your current car loan.
5. If you have a good relationship with the lender you have borrowed from and are finding it difficult to repay your car loan, you can always talk to the executives and try to negotiate for a better offer on the car loan. In some cases, reduced EMIs or discounts on the loan can be obtained if you have a good credit history.
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