Are you confused about whether you should invest all your liquid cash in buying a car or whether you must do so via a used car and vehicle loan? The choice is entirely up to your discretion, but here are 5 reasons we are listing, which tells why you must avail a vehicle loan:
1. You Can Avoid Spending a Huge Amount At Once
You must have had budget lessons as kids about savings and investments and how to be cautious about your spending. When you pay via EMIs for a vehicle loan, you have the benefit of paying in small amounts, which will help you in investing in other expenses as well. During this duration of payouts, you will eventually earn more money fromother investments, credits or monthly income. Paying the vehicle price will reduce your burden to a huge extentif you pay in small instalments.
2. You Can Build a Great Credit Score
Your credit score is very important when availing large loan amounts like a home loan. You can enhance your credit score by availing feasible loans and maintaining a good track record of making the full payments back. This good loan will let the future creditors or lenders know that you are a responsible borrower.
3. You Get Good Interest Rates and Offers
If you have an existing relationship with one of the financial entities, then you can get great discounts on the interest rates. Moreover, some financial entities have tie-ups with motor companies. In such cases, you can getmore amazing offers and deals. You must remember that you are not buying a product but availing a service. There are scores of other creditors offering competitive interest rates. It is very unlikely that you will get duped because every information is stored and managed efficiently.
4. Cash in Bank
Emergency situations can occur at any time. They are unpredictable and you must be prepared at all times to face them in terms of financial health. Having a surplus amount of cash in the bank is the only way to stay prepared and safe. Moreover, there are other important things you can take care of easily like funding education for children.
5. The Instalment Is the Easier Way Out
EMIs render a sense of relief to a person who doesn’t have cash immediately to fund his vehicle purchase. During the tenure of the EMI, you have new opportunities to earn from and get returns on previous investments. Before making a purchase, you need to take into consideration the long term impact of your decision. Purchasing a high cash value item can put a strain on your financial health in the long run. Choosing EMIs with very low-interest rates will make no major difference to your monthly budget, so you should focus more on EMI options with a high rate of interest.
In a nutshell, availing a vehicle loan is a better choice than making a one-time purchase. The process to avail such a loan is very simple and hassle-free, which brings us to conclude that there is no need for a second thought on this matter.
Image Credits: Vehicle Loans from Tero Vesalainen/Shutterstock