Cars seem indispensable to the modern lifestyle because they assure safety, comfort, mobility, and a sense of freedom to travel as per your wish. It has been noticed that the sale of used cars has rapidly grown in India because it allows people to own a car at lower prices and deprecation rates. Yes, a wide range of car loans are indeed available with which you can easily buy a used car without spending too much money but it is always wise to plan things before you opt for a loan. If you get a lower second hand car loan interest rate it will ensure lesser strain on your monthly budget. Given below are some ways through which you can enjoy low used car loan interest rates.
- Bigger down payment
The bigger the down payment, the lesser will be the EMIs. If your EMI is less, then naturally the interest rate on the loan will be less. A smaller down payment offers an upfront saving but a relatively higher rate of interest. If you can afford a larger down payment, then it is a better trade-off because your interest rate will be less in such a case.
- Shorter tenure
A longer tenure lowers the EMIs but results in a higher interest rate because the total amount of interest payable increases with time. You should choose the shortest loan repayment tenure if your budget and repayment ability allows you to. Also, a shorter tenure results in bigger EMIs but a much lower interest rate. So, it is advised that you should choose a smaller repayment period.
- Good credit score
Before applying for a loan you should check your credit history. The lender verifies your used car loan eligibility by checking your credit score. Once he is satisfied with your score, the loan gets sanctioned. A poor repayment history might attract a higher rate of interest. Also, if the CIBIL score is around 750 or above, you can fetch good deals with lower interest rates. If you are well aware of your credit report, you can easily make an analysis of your financial profile. Henceforth, you can take necessary steps to maintain a good CIBIL score, for example, paying your existing loan EMIs or credit card bills on time.
- Comparing different lenders
Before you apply for a loan on used cars, and you want to make sure that you get a lower second hand car loan interest rate then you should take quotations from different lenders and compare them. During the festive time, many lenders come up with various offers and schemes which might benefit you. Also, you can even research loan products online and make the needful comparison.
Post pandemic, everybody wants to own a personal car because it allows you to maintain social distancing and assured safety from contracting the deadly virus on daily basis. Not everybody can buy a brand new car; hence, the trend of going for used cars is prevailing in the industry. The best way to buy your dream car is by taking a used car loan which will not burn a hole in your pocket and allow you to save some money for future use. A used car loan allows you to get up to 90% of the value of the vehicle as a loan at an affordable interest rate. Here, the interest rate might depend upon factors like loan tenure, credit score, income, etc but it is still less and affordable. A lower second hand car loan interest rate has a direct impact on your monthly budget. Before you actually apply for a loan, your priority should be to get a lower interest rate. You can easily follow the above-mentioned steps to reduce the second-hand car loan interest rate. If you are interested in buying a used car and wish to get a loan against the same, you should start looking for lenders who offer quick service and require minimal documentation. You can also pick up a flexible EMI plan option and extended loan tenure so that repayment of the loan doesn’t become a headache for you and you can repay the used car loan according to your convenience. This way your dream car will just be a click away.
