As it turns out, there’s a very good reason: the interest rate.
Because car loans are typically secured by an asset (usually the car, which the lender can typically repossess to recoup costs if you default on the loan), lenders may offer lower rates than they do on unsecured loans, including unsecured personal loans.4 days ago
Is taking a car loan good?
So, if you plan to buy a Mercedes then your monthly income should be good enough to be able to service EMIs. Even after proper due diligence, borrowers are often confused as to how much to borrow. So, taking a small car is a good idea rather than going in for higher Car loan EMI of Rs. 8000-10,000 in the same income.
Is it better to take a car loan or pay cash?
The common thinking is that buying a car with cash is better than financing because you won’t have to pay interest. While we agree that buying a car with cash is generally preferable to financing, there are many situations in which that’s not the case. The best example is if you qualify for a favorable interest rate.
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