Do you want to buy a car? Here is a good news for you, as it is possible to upgrade that old clunker to a new model at the same time. By this, you can save money. If you do not have the sufficient money to buy a car, then you have to borrow money. You need a good plan, shopping and persistence in order to find the best deal. People who have good credit score do not face any problem in getting a car loan.
Remember, if you have a high credit card bill, and you have made large purchases like a car or home, then you will surely get a loan with higher Interest Rates.
Credit Score is the most important factor that lenders check before lending money. Make sure that you keep your payments current to avoid late notices, as it will appear in your credit report. It is very necessary that you make your payments on time before applying for a car loan. It is also an important factor as it dictates the interest rates to be charged on your loan.
Nowadays, many banks and financial companies are offering finance for a car at Competitive Interest Rates. You need to check and compare the various deals offered in the market. Apply for a scheme that suits your budget and fulfills your requirements.
Here are a few points that can help you in saving money on car loans:
a.) Good Credit Rating
The best method to avail a loan is having a good credit score. Lenders enquire about your credit score before lending money, as it shows your past repayment record. People who have good credit score can easily qualify for a loan and at much lower rates.
b.) Down payment or Trade-in
Lenders never provide 100 per cent funding on your car. There is an amount that you need to pay, which is known as Down Payment. Paying higher down payments can lower your loan amount which will attract lower interest rates.
c.) Consider variable rate loans
Interest rates come in two categories i.e. Fixed and Floating. Availing floating interest rates is a better option as there are chances that interest rates may decrease in coming years.
d.) Shop for Car Loans
Many banks and NBFCs are offering finance for the car at reasonable interest rates. Shop around and search for the better deal. You can visit the website of these lenders and enquire about the offers they provide.
e.) Carefully read the terms
Once you have decided the lender, you should check the terms before making a decision. The terms and conditions, loan amount and interest rates will help you to make the right decision.