Every family dreams of travelling and exploring places after owning a car. However, before owning a car, they perform thorough research on the brand of the car and the car loan provider. The loan provider is crucial since it is the loan that is going to bring them a step closer to achieving their dreams.
Checking websites and apps while reaching out to multiple lenders is essential to finding a suitable deal on a car loan. However, some may wonder whether these apps help secure good deals. You can learn about it in this article.
Understanding Car Loans
A secured loan that helps you purchase a car is called a car loan. Since this is a secured loan, the car is used as collateral. This means if the borrower defaults on his loan, the car would be considered as the repayment of the loan.
How Car Loan Apps Help Select a Right Loan
When you are looking to buy a car, these apps can help you in various ways. Some of the ways are listed below.
Interest Rate Comparison
Having access to various lenders and their interest rates is the biggest advantage of a car loan app. This feature is useful since interest rates can significantly impact the amount of interest you pay with your Equated Monthly Instalments (EMIs). Higher rates usually mean that you would have to pay more than the total loan amount.
EMI Calculators
Another useful feature offered by a car loan app is their EMI calculators. These calculators help you understand how much funds you’ll need to pay every month based on your loan amount, the loan tenure and the interest rate. Each EMI will be made of two parts, interest and principal.
By adjusting all three variables, you’ll see how different interest rates and EMI values affect the total loan amount you pay. Knowing the amount of your monthly EMI will further help you plan your budget and avoid situations that would strain your finances.
Eligibility Check
Passing the eligibility criteria is an essential step in acquiring a car loan. With the help of the loan eligibility check feature, you can find out which loans you are eligible for. The app uses your financial details and credit score to determine your eligibility and provide loan options that suit your needs.
Custom and Pre-Approved Loan Offers
Leading car loan apps provide custom offers tailored to help you own a car. This is done based on your financial history and profile. Many apps also provide pre-approved loans to save time and effort. These are helpful in situations where you don’t want to spend a lot of time on research.
Adjustment of Loan Tenure
The loan amount and the interest you pay on the loan are directly affected by the tenure of the loan. Longer loan tenure means lower EMI payments but higher interest costs. Using the EMI calculator, you find the balance between EMI and loan tenure and adjust it according to your financial situation.
Benefits of Car Loan App
Apart from helping you secure the best loan terms, car loan apps provide other benefits. Here are some of the benefits listed below.
24/7 Accessibility
Car loan apps allow you to apply for loans from the comfort of your home, unlike traditional loan applications that require a visit to the bank or financial institution. This flexibility is beneficial to busy individuals.
Paperless Process
From document submission to loan approval, most car loan apps offer a completely paperless process. Along with saving time, this also reduces the chances of errors that lead to delays in the loan approval process.
Instant Loan Disbursement
Some car loan apps can quickly process your application and disburse funds after you agree to the terms and conditions. This can be quite helpful especially when you need the funds quickly.
Real-time Updates
Instead of calling the lender to inquire about the status of a loan, you can easily get real-time updates via car loan apps. They notify about approval and disbursement of the loan amount. They also help you by reminding you of the monthly EMI dates and informing about the remaining loan amount.