Purchasing a new or second-hand car is a big decision as it involves a huge sum of money. For the same, many first-time car buyers look out for finance options. However, like with any loan, one should consider the positives and negatives before signing the papers. Knowing how a car loan works, you can prevent mistakes and choose the best car loan for you. To help you in making a good car loan decision, this blog outlines three mistakes to avoid while you apply for car loan online . Mistake #1: Not Estimating Your Overall Budget Before applying for a car loan, you should check your financial condition to ensure that you can easily repay the amount. You may fall behind on payments if you do not figure out how to incorporate monthly payments into your budget. This might result in outstanding debt and significantly affect your credit score, impacting your credibility to get loans in the future. Mistake #2: Choosing the Inadequate Loan Term It is important to use an EMI calculator when ch