Financial experts strongly advise borrowers not to wait for loan default before taking action when facing job loss or financial difficulties. According to Mint reports, Amit Setia, Chief Business Officer, Car Loans, Capri Loans, emphasized that job loss can be a temporary financial setback, and taking early action can help borrowers manage it effectively. The first step should be to assess available resources and proactively speak with the lender before an EMI is missed. Setia noted that depending on the lender's policies, temporary relief or restructuring may be explored, with supporting documents such as termination letters, bank statements, or proof of income disruption required. As reported by Mint, lenders may provide customised repayment restructuring, tenure extensions, or short moratoriums to eligible borrowers. Adhil Shetty, CEO, BankBazaar, echoed similar views, stating that borrowers must proactively approach their lenders immediately after a job loss and well before the first missed EMI payment. Shetty emphasized that acting early actively safeguards one's credit health and preserves future borrowing capacity.
According to recent Paisabazaar data cited in the report, car loan interest rates across major banks and NBFCs range from 7.35% to 14.05% per annum. For a ₹5 lakh loan over five years, the EMI can broadly range from about ₹9,983 to ₹11,647. As reported by Mint, the final car loan interest rate depends on factors such as the lender, loan tenure, loan amount and borrower profile. A car loan is a secured loan that helps individuals finance the purchase of a new or used car, with the vehicle generally serving as security for the loan. Canstar data shows that secured car loans typically offer lower interest rates than unsecured loans, with secured loans being the most common type, especially for new vehicles. The car loan market is competitive, and rates change frequently, so it could pay dividends to shop around to find the best car loan for your needs.
Experts recommend using emergency funds strategically while preserving essential expenses. According to Mint reports, Adhil Shetty, CEO, BankBazaar, stated that borrowers should ideally plan for three to six months of EMIs while preserving enough savings for essential expenses and future contingencies. Shetty emphasized that using an emergency fund to continue EMIs makes sense because it prevents immediate default. Amit Setia, Chief Business Officer, Car Loans, Capri Loans, explained that an emergency fund is designed precisely to provide support during unforeseen situations, so using a portion of it to maintain EMIs can be a prudent approach. Shetty highlighted that borrowers should ideally prioritise reserving three to six months of EMIs from available savings, while carefully avoiding completely exhausting their entire liquid corpus to cover other daily essentials. Additionally, borrowers should check if they have loan protection or credit insurance, as these policies often provide vital temporary assistance by covering EMIs during sudden job loss. Canstar advises that borrowers should consider getting pre-approval for their loan before hitting the car yards but know their upper limit, not the amount they must spend.
Lenders are often highly supportive and can offer critical temporary relief options during job loss situations. As reported by Mint, lenders may provide customised repayment restructuring, tenure extensions, or short moratoriums to eligible borrowers. To qualify for such relief, borrowers must present formal financial proof, such as their official termination letter and recent bank statements. According to Mint reports, Amit Setia, Chief Business Officer, Car Loans, Capri Loans, noted that depending on the lender's policies, temporary relief or restructuring may be explored, with supporting documents such as termination letters, bank statements, or proof of income disruption required. Adhil Shetty, CEO, BankBazaar, emphasized that borrowers should present formal financial proof, such as their official termination letter and recent bank statements, to qualify for relief options. The key is to stay vigilant and act before financial stress leads to a car loan EMI default, protecting both immediate financial stability and long-term credit health.
Financial experts warn that taking multiple loans can significantly impact affordability and financial stability. According to Moneycontrol reports, every new EMI reduces the amount of income available for essential expenses, and borrowers should calculate affordability considering unexpected expenses like insurance premiums or medical bills. The report emphasizes that having an existing home, car or personal loan does not automatically stop you from borrowing again, but lenders closely examine the EMI-to-income ratio and total monthly commitments. CIBIL reports indicate that lenders consider the proportion of income already committed to existing loans, with approval chances reducing when total EMIs become too high compared to monthly income. Before applying for additional loans, borrowers should add up all existing EMIs including home, car, personal and consumer loans, then assess whether there's sufficient income remaining for savings, insurance, emergencies and flexibility. Canstar advises that the lowest interest rate may not necessarily mean the best deal overall, as upfront and ongoing fees can eat into savings, while features like early repayment options may provide better value for some borrowers. The comparison rate, which takes into account interest plus most ongoing fees, can provide a more accurate estimate of total loan cost per year.
