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Tips and Tricks for Managing Your Car Loan


Cars have become a necessity of modern life and that’s one of the key reasons why car loans have grown more and more popular through the years. However, in trying to achieve our dream of getting the perfect car, we sometimes forget to plan adequately before opting for a car loan. In the following sections we will discuss some tips and tricks for managing your car loan so that you can pay it off with ease.
Down Payment:

This is where many first-time car buyers make a mistake. By making only a small down payment, you might see the upfront cash saving benefits, but in the long term the picture isn’t as rosy. A small down payment can cause various adverse effects on the car loan tenure, interest rate and payable EMIs. It is advisable that if possible you try to make a larger down payment when you take a car loan rather than the minimum amount. This automatically reduces the car loan quantum and by extension generates savings in terms of the total interest payable over the loan duration. It may seem like a large expense at the outset but it will help save your hard-earned money and make the loan repayment process much smoother.

Interest Rates and EMI:

You should be clear about the interest rates and the consequent EMIs offered by banks. A low interest rate might not the best idea especially in case of long loan tenures. It is better to do some research in advance and using a free online car loan EMI calculator to estimate your overall interest outgo before signing up for a specific car loan. Doing this research helps you to better plan the tenure and overall repayment amount without getting into any financial problems at a later date.


You should always try to choose a shorter loan tenure if you can manage it without overly straining your monthly budget. People have a misconception that tenure is independent of the loan amount and interest rates but the truth is somewhat different. A longer tenure may decrease the individual EMIs but you will have to pay more money as interest over the loan tenure. A shorter tenure increases the individual EMI payouts but you also end up paying less money as interest over the entire loan tenure.

Transferring your Car Loan:

If you are facing troubles in settling existing debt because of high EMIs or interest rates then you have the option to restructure or transfer your existing car loan. Restructuring a loan means that the bank will alter the interest rates, EMIs and tenure according to your repayment capacity. Apart from the fact that and the bank may not grant you the option of restructuring, a restructured loan will cause a substantial dip in your credit score. You can also transfer your loan to another bank that is offering you a lower interest rate on your outstanding car loan principal. This has the potential of generating significant savings in terms of your car loan interest payouts over the remaining loan tenure.

Debt Consolidation:

This is a way to manage your car loan along with your other debt obligations such as a personal loan or credit card debt, if you are finding it difficult to manage your existing debt. Consolidation allows you to turn all your different loans into a single large loan and gives you the freedom to pay off just one loan EMI every month. This process is highly convenient as you do not have to keep track of different loans, their EMIs due dates and the paperwork that comes with them. This also makes the repayment process easier and reduces your chances of missing out on the due dates.


It is essential that you plan your budget and loan repayment before taking on a car loan. Using a car loan EMI calculator is the best way to find out how much you will have to shell out each month in order to pay off your loan. This will allow you to manage your car loan according to your repayment capacity. It is also advisable that you do your research the key terms and conditions of the car loan such as pre-payment charges, processing fees, eligibility criteria, etc. before you zero in on an option that suits your unique car loan requirement.

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