Kiran Chopra
COVID-19 has brought a lot of hardships around the world from a financial perspective. As millions of people have lost their jobs or their primary sources of income, a lot of people still have to pay outstanding auto loans and vehicle EMIs. In such difficult circumstances, it is only fit that you might have to adopt smart measures to micro-manage your finances and pay your loans out without fail.
Make a precise plan for your financial budget for the month. Separate the amounts for your auto EMI beforehand, and then allocate the remaining finances to your expenses.
A large down payment significantly lowers the amount of interest that you have to pay for your *auto loan*. Thus, making a large enough down payment can be a smart measure to bolster your savings.
Buying your fantasy car is great, but you must consider your financial circumstances amidst Covid-19 too. Get a smaller car, with a lower EMI. Or if you have already bought a costly sedan, consider exchanging it for a smaller car. This would help reduce the burden of EMI on your shoulders.
Contact your creditor immediately to reduce the tenure for your loans. A shorter loan tenure will increase your EMI amounts but will decrease the amounts of interest for the long-term. Thus, you save more money with a short-term loan.
But for people with no jobs, they’ll need an immediate respite from the EMIs of auto loan. Contact your creditor and ask him to prolong your loan tenure. You may probably have to pay more in the long term, but for the time being, you’ll have to pay a lot lesser EMIs.
The best way to always stay abreast of your vehicle loans by downloading a vehicle loan calculator. You can easily calculate the loan amount you need to pay for the month, and associate alarms with it to remind you.
If your present vehicle loan interest rate is higher, consider refinancing your loan with a loan of lower interest rates. Refinancing means you avail of a new loan with lower interest to pay off your existing loan.
If you have assets that can be sold or have substantial savings, consider pre-paying your loans to entirely write off your liabilities.
Ask your creditor how to get a small business loan during COVID-19. Start a small business online using the loan. This will help you raise extra income to tackle your used car loan.
If you have certain other loans, consider merging all your loans together. This makes it easier to manage all the amounts and their respective deadlines making the loans easier to tackle.
You wouldn’t want to miss your deadlines or piling up installments in these testing times of COVID 19. Mismanagement of vehicle finance loans can lead you to lose your car altogether. Thus, it is imperative to maintain healthy management of your vehicle loan during COVID 19.
FAQ
1.Can Auto Loans be prepaid?
Yes, you can choose to prepay your loan by following the necessary guidelines provided to you by your lender.
2.Is the tenure of loan payment flexible?
Depending on your financial institution, you might be able to extend the tenure of your loans and debts.
3.Can I lose my car if installments are not paid for long?
Banks and financial institutions usually have a period of 3 or 6 months for outstanding installments, beyond which they might decide to seize your car.
