Business & Finance

Four simple tips to get a lower interest rate on your Car Loan

Checking your credit scores and opting for shorter loan tenures could help you secure favourable car loan interest rates.

Four simple tips to get a lower interest rate on your Car Loan

Cars provide convenience, autonomy, and accessibility, allowing individuals to commute to work, run errands, travel, and explore new places with ease. However, purchasing a new car often requires a significant amount in one go that may be beyond the means of consumers. This is where new car loans come into play, offering a way to finance the purchase of a vehicle over time.

With the help of a new car loan, you can divide the cost of your car into small manageable monthly instalments. With competitive car loan interest rates and flexible repayment tenures, new car loans make borrowing hassle-free and convenient. However, if you are planning to avail of a car loan, one of the most critical aspects of financing is securing a favourable interest rate. A lower interest rate can help you in saving on the overall cost of the loan.

Here are a few simple tips that can help you get a lower car loan interest rate when you buy your preferred car.

Check your credit score: Your credit score is one of the most key factors that determine the car loan interest rate. A higher credit score may help you get a lower interest rate while a lower credit score could result in unfavourable loan terms. Experts advise checking your credit score before you initiate the application process. If you have a low score, you can explore ways to improve it.

Shop around: Do not settle for the first loan offer you receive. Look around and compare interest rates from different lenders, including banks, non-banking finance companies, credit unions, and others. Choose the one that suits your requirements and the budget the most.

Choose your tenure carefully: Shorter loan tenures typically come with higher EMIs but lower interest payments. On the other hand, longer loan terms may seem attractive due to lower monthly instalments but often result in larger interest payments. Consider shorter loan terms so that you can save on interest costs.

Make a larger down payment: A larger down payment reduces the amount that you need to borrow, which can lead to a lower interest payment. It also demonstrates to lenders that you are financially responsible and less risky to lend to. It advised that you should save a substantial amount for the down payment before you plan to purchase a new car.

A lower car loan interest rate can save yourself a significant amount of money over the life of your loan.

Bajaj Finance, one of the leading NBFCs in India, offers new car loans with simple eligibility criteria and minimal documents. With Bajaj Finserv New Car Finance, you can get a loan of up to Rs. 10 crore and bring home your desired car with ease. It also comes with flexible repayment tenures of up to 96 months. This long repayment period allows you to divide the cost of your new car into small monthly instalments.

Visit the Bajaj Finserv website today to learn how a new car loan can help you bring home the car of your choice.

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