Cars are indispensable to the modern lifestyle, assuring easier mobility, safety, and a sense of freedom to travel on your terms. Consequently, India’s used cars sales are soaring as it allows people to own a car at lower prices and depreciation rates.
Besides, with a wide range of car loan offerings available, you can easily buy a used car without draining your savings. But, it is wise to plan things before you opt for a loan. Ideally, a lower interest rate is always preferable to ensure lesser strain on your monthly budget.
If you are wondering how to reduce interest payable on your second-hand car finance, here are some top tips that will let you enjoy low used car loan interest rates.
Make a bigger down payment
The bigger your down payment is, the lesser are the EMIs and the amount you pay as the used car loan interest rate. Sure, a smaller down payment offers an upfront saving. But, it results in a relatively higher rate.
If affordable, you should make a larger down payment as it lessens the principal amount.
Check and maintain a good credit score
Take a step back before getting a loan and check your credit history. Before sanctioning the loan amount, a lender verifies your used car loan eligibility by checking your credit score. A bad repayment history can lead to higher interest rates. On the other hand, a CIBIL score of 750 and above can fetch you great deals with lower interest rates.
Being aware of your credit reports lets you analyse your financial profile. Thus, you can take measures to maintain a better CIBIL score, like paying your existing loan EMIs or credit card bills on time.
Additional Read: How to Improve Your Chances of Getting a Used Car Loan?
Go for a shorter tenure
Depending on your budget and repayment ability, choose the shortest loan repayment tenure. A longer tenure sure lowers the EMIs, but you will incur a higher interest rate as the total interest payable keeps increasing with time.
On the flip side, a shorter tenure results in bigger EMI payouts but a far lower interest rate. Therefore, it is wise to choose a smaller repayment period.
Compare various lenders
Before opting for a used car finance offer, compare the interest rates for different lenders and look for festive offers and schemes. Nowadays, you can simply research loan products online.
Are you in pursuit of used car loan with competitive interest rates? Turn to Tata Capital. With an attractive used car loan interest ratestarting at 15%, you can avail of a loan amount as high as Rs. 50 lakhs. Apply for a loan online and receive your amount directly into your bank account within 24 to 36 hours from document submission.
With Tata Capital’s instant online approval and minimal documentation requirements, your dream car is just a few clicks away! We offer flexible EMI plans options and an extended loan tenure so that you can repay the used car loanat your convenience. Get in touch with us today!