PROS AND CONS OF BUYING A CAR ON LOAN

Buy Car on Loan :- Pros & Cons

Car loans can be very useful when needing to purchase a car, but can also prove to be very problematic at times. Buying a car on a car loan can undoubtedly let you buy the car instantly but it comes with a heavy interest which if not paid can cause you to pay penalties. As everything comes with some pros and cons so does the buying a car on a car loan comes with:

Pros:

  • The benefit of a car loan is that you get to buy a new car without paying the full amount.
  • In today’s era of so much expansion, it is not possible for a middle-class family to buy a car on cash and pay altogether for it.
  • The only option they have in that case is to buy a car on a loan. Car loans allow them to pay for a vehicle they would not otherwise have funds for.
  • Loans also help you to build a good credit score which can help you a lot in finances.
  • Also, it is very appealing to think of driving off in a new car, without spending time saving.

Cons:

  • While buying a car on a car loan is a great way to obtain a car without paying the money altogether, the amount of interest you pay can amount to a large sum.
  • The high interests can also lead you to pay penalties if the monthly amount is not paid on time.
  • Also in car loans, the car is technically not yours until you pay the full amount.
  • High monthly payments can also leave you with stress if in the future you face any financial problem.
  • The process of loans is very time consuming and demands a lot of effort.
  • There are some set of rules provided by the bank for loans which if not followed on time can lead you to be in big trouble.

The answer depends upon the type of car loan offered to you. While a person having a good credit score has to give comparatively low interest than that of a person having a low credit score. It all depends upon the offer and your current financial condition. Whichever option suits you best in a situation that is whether cash or loan, go with it.