Should you take a car loan?

Taking a loan for buying a car, and paying around 10 percent interest on it is not uncommon. On one hand it gives ownership of a car while on other hand it makes you feel the pinch of EMIs.

But is taking a car loan worth it?

Sharing few thoughts -

- If you don't have enough cash in hand but buying car is a necessity due to commuting requirements or business requirements, there may not be any other option.

- If you think that you will become more financially disciplined & avoid unnecessary spending, then go ahead. But then, it poses a large question about your fiscal discipline.

- If you are using for your business, then you may be able to get tax benefits & loan may help.

- If you think that - "Interest rate is 10% only and mutual funds will give me 15 percent", then revisit your assumptions. Mutual funds/ stocks have historically given good returns, but are you sure that you will get 15 or 12 or 24 or whatever percent of "assured"returns they "promise"?

- If you want to upgrade your lifestyle because your position & lifestyle needs a Honda City and not Honda Brio, and you are not in a position to refinance, then rethink if you really need to go for this ...

- If your previous car is like 5 year old and you need to get a news one because everyone is having a new car, then rethink ...

What are your thoughts?

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