Cars are valuable assets after all, and will serve your purpose in the long term. It may however, not be possible for you to always finance your car purchase with cash or savings. In fact, experts say that it is not a good idea to spend all your savings on large purchases. Instead, breaking it down into instalments is a much better way to keep your liquidity intact. This is where a well-defined car loan comes in.

Benefits of Car Loans

It is common for people to go for loans to fund their car purchases even if they have enough funds for the purchase in the form of savings. There are several benefits that you get when you avail car loan for a new car or even if you are going for a used car loan. Some of these benefits are as follows:

Stability of Liquidity

When you avail a car loan for your purchase, you end up protecting a major chunk of your savings getting spent at once. Not only would you be buying your favourite car, you also end up having funds for any emergencies that you may encounter in the near future.

Building Credit Score

Car loans can be a great way to build your credit score in the short term if you have a regular income. Loan repayment history and your regularity in paying your EMIs can have a major impact on your credit score. If you are planning to avail a major loan in the future, availing a small car loan and repaying it promptly with the car loan interest rate can amp up your credit score. Even if you want to avail a loan for a better car in the future, your credit score would be an important part of your car loan eligibility criteria.

Tax Benefits

While car loans do not offer any tax benefits for individual customers, you are eligible for tax exemption if you are self-employed. If you are going to use your car even a little for your business purposes, you are eligible for a tax exemption under Section 80C of the Income Tax Act.  

Instantly Accessible Car Loans

Once you decide to avail a car loan, you need to decide whether to go for a bank or other financing companies. While banks may seem like a good option, it is important to know that other financing companies can offer you much lower car loan interest rates. PaySense makes it easy for you to avail quick and instant car loans without any lags or hassles for approval. Get access to your car loan by downloading the PaySense app and applying for it right away.