Found yourself the perfect pair of wheels? Then you’re probably fretting about how to finance its purchase. Well, there are numerous loan options available in the market today, which can help you get your dream car without draining your savings. The problem arises when you have to make hefty EMI payments on it. Lucky for you, there are various ways to lower your EMI without affecting your finances.
Here are a few tips on how to get the lowest used car loanratesto reduce your EMI burden.
Compare multiple lenders
When you’re shopping around the market for a used car loan, make sure to get in touch with different lenders. This will help you compare the interest rates, along with loan tenures, repayment flexibility, and the loan amount you can get to finance your desired used car model. Look for lenders that offer you the most affordable terms on loan.
Improve your credit score
Your credit score directly impacts the interest rate you get on your loan. Lenders usually look into your credit history to evaluate your repayment capacity and finalise an interest rate accordingly. That’s why if you have a good credit score of 750 or above, you’re more likely to get the second-hand car lowest interest rates.
If not, you should ideally improve your score before applying. Pay off any pending credit dues and make sure your credit report is updated. With due diligence, you can secure a lower interest rate result and thus lower the EMI payments and reduce your loan burden considerably.
Additional Read: 4 Step Guide to Buy a Used Car in India
Choose a longer tenure
Another way to lower your EMI is to opt for a long-term loan. A long tenure will automatically reduce your monthly payments. However, this also means that you will end up paying more interest over time. Hence, before you apply for a loan, check your loan affordability with a used car loan EMI calculator and go for a tenure that works best for you.
Put down a bigger down payment
Typically, lenders only finance 60-90% of the on-road vehicle cost, and you pay for the rest in the form of a down payment. If you’re not getting 100% financing for the vehicle, you can make a larger down payment if you can afford it. This will reduce your principal amount on loan and hence your EMI.
Go for a dealer-lender partnership
This is hands down the smartest way to get the best loan offer when buying a second-hand car. Since both the parties involved have a standing partnership, there is less risk for the lender, so you can avail of more reasonable terms on loan. Besides, the process is also quick and seamless.
Additional Read: How to Pay Off Used Car Loan Faster?
Want to buy your favourite car but have trouble arranging the funds? You don’t need to worry! At Tata Capital, you can get a quick loan at some of the lowest used car loan interest ratesin the industry. With our all-digital approach, you can get the funds within 24-36 hours and take home your car in no time!
Visit here for more information.