Having a car as an asset has become more of a necessity than a luxury today. Especially in urban locations, a personal car can save you from the hassle of travelling in crowded public transport facilities. But, buying a brand new vehicle can be a pricey affair. That is why second-hand cars have a huge demand in our country.
On top of that, getting an automobile has become way easier. With a host of lenders offering loans at attractive used car loan interest rates, you can smartly finance your used car purchase. But, you must do proper research before finalising a used car and the loan.
Adequate planning beforehand can get you a fantastic deal. Here are some practical tips on how to get a car with a low used car loan interest rate.
Negotiate on the vehicle’s price and loan amount
When you cut down the car’s cost, it ultimately leads to a lower loan cost and interest rates. So, the first thing you need to do is negotiate the used car’s price. It is an often overlooked but effective trick to save some extra bucks. Try to approach several dealers and explore the discounts and offers available.
After the car price, negotiate the loan processing fee and interest rates. Some lenders might charge a high processing fee and some hidden charges as well. It’s a smart move to discuss these things well in advance, and you can even get some relief.
Research for the best loan offering in the market
Keep an eye out for the best possible deals for your car loan. If possible, make a list of lenders and evaluate their offerings and interest rates. Explore their EMI plans, documentation requirements, tenures, disbursal time, and more. Gain as much information as you can to get the perfect loan with the most competitive interest rates.
Check and sustain a favourable CIBIL score
As you might already know, a good credit score is critical to your financial profile. Therefore, it is a good practice to check your credit report before applying for a loan. Your lender will thoroughly validate your used car loan eligibility by looking at your CIBIL score. Ideally, a CIBIL score of 750 and more is highly likely to fetch you a deal with lower interest rates.
Choose a shorter loan tenure and plan your finances
A great tool for planning second-hand car finance planning is a used car loan EMI calculator. It will let you get an idea of the EMIs and interest rates according to the tenure you choose.
Furthermore, you can opt for the shortest loan tenure affordable. A shorter period sure leads to bigger EMI payments, but the interest rates come down considerably.
If you are in the hunt for a second-hand car, these actionable tips mentioned above can let you avail the lowest possible interest rates on your used car loan. Be sure to read the fine print, negotiate firmly, and you are good to go!