Now Easily Own a Decent Car With Low Used Car Loan Interest Rate
Posted on 14 October, 2020 by Hero FinCorp
Getting behind the wheels of a car is still a luxury that not many Indians can afford. As there are hundreds of people who do not find it acceptable to spend all the hard-earned money on a car. This is the reason people have started moving towards the option of used cars which might not perform as good as a new model but are decent enough to fulfil your dream of owning a car and enjoying all the perks offered by it. There are numerous financial institutions that offer used car loans to help you buy a pre-owned car.
However, before applying for the loan, you need to keep in mind the factor of interest rate as the percentage of the interest rate can make all the difference to your EMIs. In addition, the used car loan interest rate greatly varies on the basis of the lender you choose, the amount of loan you borrow and the total duration you require to repay the loan. Moreover, you will have to scout the markets to select the financial institution which can offer the loan at lowest interest rates.
Factors you must consider while planning for a used car loan
• Focus on the condition of the car – Getting a loan will be easier and less expensive if the second-hand car is in a good condition. Hence, you should not focus on the price tag of the car but on the cost that comes with its ownership which includes maintenance cost as well as the monthly repayment you have to make on the car loan.
• Interest rate – Getting the lowest interest rate on your car loan is not an easy task, and hence, demands a little bit of research on the economic climate of the market. The current rate on the used car loan is somewhere between 10 to 11%. However, the factors such as your credit score, debt to income ratio, car’s age and the loan tenure can create a huge impact on the used car loan interest rate.
• Down payment – Many of the financial institutions may propose 85 to 90% financing on the on-road price of the car and the rest of the amount will be available for down payment. In such cases, you must try to keep your down payment as high as your pocket allows as this will significantly reduce the total amount of loan and the interest you pay on the EMIs.
• Credit worthiness – You must check your credit worthiness before applying for the loan as your chances of approval majorly depend on your credit score. A higher credit score can improve your chances of getting the loan approved by almost 90%.
• Loan processing fees – Your car loan provider will also charge a certain amount of fees for all the paperwork, documentation and processing your application. This fee will also depend on the loan amount, tenor and the down payment you make.
To sum up, you can now easily buy a car and enjoy the long drives with your family, by simply applying for a loan. The markets these days are flooded with multiple financial institutions and lenders that can provide flexible repayment options, low used car loan interest rate and acceptable terms and conditions. Along with looking for a reliable financer, make sure to take a test drive of the car to check its condition.