Saturday, March 3, 2012

Cons of Raising Car loan Interest Rates

Usually, car loan interest rates comparatively stay high than other loans. And, nowadays, reserve bank of India (RBI) has been increasing the base for car loan interest rates. This measure is primarily aimed at containing inflation, which directly impacts the car finance solutions.

Inflation has already had a severe effect on the middle class individuals, which left their monthly budget tight enough to breathe in and out. If an individual is paying a car loan under floating rates, their equated monthly installments (EMIs) on car loan scheme become uncertain and are bound to go up.

If the impact of continuous rise in interest rates on car loans india is severe on you and you are looking forward for suggestions to deal with situations to make it hassle free. Following are some of the possible suggestions that might help:

  • You should have a look at your budgets and actual expenses in first place. Determine the areas where you can cut down your expenses. If you have not been budgeting or recording your expenses, this is the right time to start doing now as it is a good habit and a requirement of the tough time.
  • If you made any decision to purchase some electronic gadget or a home appliance, hold on to that thought and pull of the purchase under the carpet for some time.
  • If you are using a credit card, then, it is better to put that in a locker for few months, so that your impulsive purchases can be avoided. Moreover, you will develop a tendency to spend less when you pay through cash.
  • It is better to prepay your car loan to the possible extent as per your budgetary constraints. You can spare money should be used to pre-pay your loans except the daily expenses. And, don't you even think of investing with an idea to make quick returns, which are aggressive in nature and cannot be that fruitful.
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