When you purchase a car, you might have to shell out a huge chunk of money at one go. This might be difficult when it comes to managing your finances for a purchase. In such cases, you can take a short term car loan. When you decide to take any kind of loan, the most important thing to consider after the loan amount and interest rate is the term of the loan.
A short term car loan is when you take a car loan for a short period of time, unlike loans which have a longer tenure. A short term car loan has its own advantages.
1. Shorter Tenure Means Low Amount of Interest Rate
A lender will provide you with the best car loan interest rates if you avail the loan for a short term. As the repayment date is not more than 3 years there is a low risk of default on your part as a borrower. It is clear that you pay less as compared to a long term loan as the tenure is short, unlike long term loans where interest keeps accumulating over the years.
2. Owe Less Than the Worth of Your Car
The value of a car starts depreciating as soon as it leaves the showroom. There might be a situation wherein the due course of your long term loan you will owe more than what your car is worth. This is not an ideal situation for your finances. When you take a short term car loan you can easily avoid such a situation as you pay your debt sooner than the rate at which the car’s value depreciates.
3. Become Debt Free in a Short Span of Time
A short term car loan is a road to become debt free in a short amount of time, unlike long term car loans. You need to be highly disciplined about your car loan EMIs. You can calculate your car loan EMIs by using a car loan EMI calculator and know beforehand the approximate amount you will have to pay each month. The faster you pay the loan, the sooner you can be free of the payments and focus on other things.
Advantages of Availing a Short Term Car Loan with Indiabulls Dhani
- No hypothecation of your car
- No need for collateral
- Loan tenure ranges from 3 months to 24 months
- Competitive interest rates
- Online loan application
- Swift approval and instant disbursal
- Prompt customer service
If you are looking out for being debt free sooner, then you should consider taking a short term car loan.