Which Are The Best Ways To Get Car Loan Deals?by Arjit Chalmela Finance Student
One of the primary concerns while taking out a four-wheeler loan is the availing the best deal. We naturally gravitate towards lenders who offer the lowest interest rates and higher tenure. But what many are unaware of is that the onus of getting the best deal is in the hands of the borrower. If you prepare for the loan beforehand, you can get a deal that fits your budget and is easily repayable.
Following are the ways to land with the best auto loan deal –
- Research lenders
No matter the kind of loan you take, you must never underestimate the importance of research. Between public and private banks, NBFCs, vehicle dealers, and brands offer new as well as a used car loan, there are many options available. Every lender offers different interest rates, tenure, and levies varied charges as well. Therefore, research, find the best lender and finalise the one who offers the most economical deal.
- High down payment
This is the surest trick which helps you get the most affordable loan. Usually, you get up to 90 per cent financing on car loans. But if you opt for maximum finance, you end up with high-interest rates, which increases the overall repayment amount. On the other hand, the higher the down payment, the lower the interest rates levied. If you have the funds, opt for a higher down payment as it helps in the long-term.
- Loan tenure
The maximum tenure for car loan is generally between 5 to 7 years in India. But it is not wise to go for the maximum tenure only because it is viable. Like it is with low down payments, long tenures can dramatically increase the interest rates. Surely long-duration reduces your monthly EMIs, but in the long-term, you end up spending more.
- Credit score
The most crucial document you need to offer the lender while applying for a car loan is the credit score. It gives the lender insight into your credit behaviour. They analyse the funds you raise towards the debts monthly and assess if you have existing loans or defaulted them anytime. You need to hold a minimum score of 750 to get the loan approved. High credit score also helps negotiate the terms of the loan and acquire a cheaper deal.
- Negotiation of terms
If you have decent credit rating and all the documents are in place, there is a chance you may land deals from more than one lender. However, avoid settling for the first car loan deal you get. Do not hesitate to negotiate the terms of the loan. A little negotiation helps reduce the interest rates, discount on processing fees, and waiver the prepayment penalties.
Created on Jun 19th 2020 02:26. Viewed 125 times.