Things to do before applying for a car loan top up
A car loan top up in simple words means borrowing additional money from lender, especially a bank or an NBFC from where you have financed your present car. People borrow loan top ups for various reasons, some do it for paying some personal loan or credit card debt and some do it for raising money for wedding, child education, home renovation, buying jewelry and some do it for buying additional accessories for their car. Whatever is the reason, below are a few things to do before applying for a car loan top up or car refinance to get best interest rates:
1. Maintain a good loan history
If you really want to apply for a top up auto loan, you need to pay your loan installments on time, as bounced checks and/or consistent nonpayment of EMIs will degrade your loan track record making you ineligible for additional loan money. If the date of your car loan installment is 7th, then your bank check or ECS should clear on that date. Some people think that getting refinance or top up on their loans is really easy whether they hold payments or not but this is not the case.
Monthly Loan Installment Date
Degraded Credit Score
Monthly Loan Installment Date
Improved Credit Score
2. Pay off personal loan/credit card dues
Most people in developing countries apply for a loan top up to pay off some type of their debts and most of the times these debts consists of personal loans, credit card dues plus additional charges, borrowed money from friends, etc. but they forget that the most important thing to do before applying for an auto loan top up is to clear their previous and present dues first because before sanctioning your top up loan, every bank will check your past and present credit records with the help of different credit rating agencies and if you some pending payments not paid, your top up loan application can be rejected.
3. Maintain good balance in your savings account
When applying for a car top up loan, banks will ask you to submit savings account statement, present income proof, residence proof, and other documents. You are able to provide them with all documents and that is fine but the most important thing you must note is that you need to maintain good balance in your savings account if you want to getauto loan top up.
4. Keep your car in good condition
Also your car on which you are
taking a top up loan must be in good condition. For that, you need to do the
regular maintenance of your car. Getting regular car service and getting the
wears and tears repaired on time is the key to keep your car’s condition
healthy and its being eligible for a top up loan. Also, age of your car is also an important factor in getting the amount of topup.
The above were a few things to do before applying for a car loan top up and getting your top loan application accepted by the bank. Least but not last, maintaining car’s health and the health of your personal finances including your credit history will help you in landing for the lowest interest rates and maximum top up money on your auto loan.
More by this Author
After publishing an article on “Harassment On Phone By ICICI Bank DSA” which was regarding the credit card problems I was having and how I settled the card, I am receiving questions regarding credit card...
If you are overburdened with your longstanding credit card debt, fed up of receiving harassing phone calls by your credit card issuing bank, want to get rid of debt collectors who threaten you at your home and office on...
This story is based on a true incident that happened in a government medical college in India.