Planning to bring home your dream car this festive season? Find out how to obtain a used car loan at a competitive interest rate
The festive season is a perfect time to bring significant upgrades in your life. Purchasing your dream car is one way of bringing in a substantial comfort and luxuries in life. However, buying a car can be an expensive affair, and one may often need financial assistance to bring home your desired car. This is where opting for a used car loan may help. Acquiring a used car loan can provide the necessary financial support if you are unable to pay the entire price upfront.
The interest rate you pay when financing a used car has a significant effect on the total cost of the loan. Securing favourable used car loan interest rates not only leads to lower monthly payments but also significant savings over the tenure of the loan.
Lenders such as Bajaj Finance provide used car loans with flexible repayment terms and affordable interest rates, making them a viable financing alternative for borrowers.
Here are five suggestions to help you get the most favourable used car loan interest rates:
1. Create a reasonable budget
Establish a budget that accounts for the total cost of the vehicle, including taxes, fees, and other potential costs before you start your used car search. Remember that a larger down payment may translate into a lower loan amount, which may translate into lower EMI payments. Avoid exceeding your budget because doing so could lead to higher interest payable or long-term financial hardship.
2. Make a sizeable down payment
A substantial down payment not only lowers the loan amount needed but also shows lenders your ability to manage your finances. This can be quite beneficial for obtaining competitive used car loan interest rates. By making a larger initial deposit, you are essentially reducing the lender’s risk, which may result in a lower interest rate offer.
3. Maintain a strong credit score
One of the most crucial factors that lenders look at before approving a used car loan and establishing interest rates is your credit score. Make sure to check your credit history before applying. Your credit score reflects your ability to repay debts. A lower interest rate could be the outcome of a higher credit score, which indicates less risk. A CIBIL Score of 720 or above is ideal for securing competitive used car loan interest rates.
4. Maintain a low debt-to-income
Your ability to make your EMI payments on time is evaluated using the debt-to-income ratio. It is a crucial factor that lenders consider when calculating the used car loan interest rates. Your loan application may be declined or your interest rate may increase if your debt-to-income ratio is too high.
5. Display every source of income
Your salary has a big impact on your used car loan interest rates, just like it does for any other loan. Lenders calculate your interest rate based on your income. You can acquire a lower interest rate if you have a stable income and a reliable employer. The company you work for has a role in determining the interest rate as well.
You can get keep the above-mentioned points in mind to get the most favourable used car loan interest rates. Bajaj Finserv Used Car Loan with high-value finance of up to Rs. 77 lakh is a great way to fund your used car purchase. With this loan, you can obtain asset-based financing for up to 100% of the car’s value. You can also try out the used car loan EMI calculator available on the Bajaj Finserv website to calculate your EMIs promptly. Enter your selected loan amount, interest rate, and loan tenure to calculate your EMI.
Visit the Bajaj Finserv website to apply for a used car loan in a hassle-free manner.