Owning a car you once dreamt of, is an achievement. However, repaying the loan without any hassles is an even bigger achievement. Although you are exhilarated to have your car, somewhere, there is a pressure looming until you fully pay off the car loan. Hence, it makes sense to pay off the balance on a car loan when you feel comfortable, financially.
You can decide to pay off the balance amount on the car loan if:
- You have enough cash on hand to repay the loan at that particular time.
- Your lender does not charge a pre-payment penalty.
- The note has as high car loan interest rate.
Besides, various factors affect the repayment of your car loan.
Factors Affecting Repayment of Car Loan
- Your income
- Financial health
- Family expenses in present and future
- Tenure of the loan
- Amount of the loan outstanding
- Any fee that the lender might levy on you for paying off your loan
- Is there tax exemption on a car loan
When to Pay Off the Car Loan
You should pay off the balance on a car loan when the pre-closure charges are not too high compared to the EMIs. You can also pay it off when the after-tax return of investing the money is below the rate that you are paying for the car loan.
When you consider repaying the loan, you should also calculate the difference between the amount you would incur if you pay off the loan and the amount if you were to continue paying EMIs. You also need to remember that you cannot get tax exemption on a car loan; only commercial vehicles are tax exempted.
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Several banks and financial companies offer car loan at competitive interest rates. However, the procedure and disbursal of the loan amount may take longer than expected. Moreover, many banks do not even provide 100% of the showroom or on-road price. To escape all the hassle and confusion, go for the best option and apply to PaySense. Paysense not only provides easy and simple steps to apply for a loan, but also disburses the loan amount within no time. It offers you loans up to Rs2 lakhs that are guaranteed to be approved instantly. Also, for your benefit, the car loan interest rate depends on your credit score and annual income. You can avail this facility and apply for a car loan by logging on to our website or downloading the PaySense application on your phone, NOW!
Apply for Loans of upto ₹5 Lakhs easily using your phone or laptop, and pay back on low EMIs