A car is the sign of ultimate comfort and luxury. Yet in today’s world it is has become more of a necessity. To get a firsthand experience, many people are choosing to opt for a used car than invest in a new car a first time investment. If your finances cannot afford a used car, then used car loans are available at ease. They help you bridge the financial gap and buy a used car. There are a few things which you should keep in mind when you opt for a used car loan. Here are some tips which you can use to get the best deal on your used car loan.
1. Look Around for The Best Car Loan Rate
When you want to buy a used car, you look around for different option. You check the condition of the car, the documents, safety feature and finally negotiate the price before the purchase. Follow this same process for a second hand car loan. Look for lenders who offer you the best rate. Dealers might suggest you to take the loan only from lender who have tie ups with the dealer. This is not compulsory. You can choose any lender you like. Assess all the additional costs involved such as the processing fees, pre-payment fees, late fees etc.
2. Negotiate the Car Price
The thumb rule to get a good rate for your loan is to negotiate the price of your car as much as possible. If the cost of your car is less, then you will have to avail a loan for a lesser amount. This way you can save on your loan amount and in turn on the interest rate.
3. Borrow as Per Your Need
Ideally, you should always set a loan amount as per your needs. If your used car cost Rs. 8 Lakhs and you do not want any other add-ons then you should avail a loan for Rs. 8 Lakhs only and not more even if you are eligible for a higher amount. Usually lender only finance 80-85% of the cost of the car, but there are some lenders who also give 100% finance. So when you borrow as per your needs you pay an interest rate only for that much amount.
4. Check your CIBIL Score
Unsecured used car loan does not have a criterion where you have to keep any collateral. In such cases the lenders check your CIBIL score to get an idea of your payment patters. If you have paid your debts on time, then you have an impressive credit score and this helps you get a used car loan faster.
5. Competitive Car Loan Interest Rates
Do the math. Look at the interest rates and calculate how much you will have to pay at the end of each month. A car loan EMI can be calculated using the car loan EMI calculator. The used car loan interest rates usually start at 11.99%.
Use the above 5 tips and save as much as you can on your used car loan. This will help you manage your funds and also get your car home without any stress.