Purchasing a used car is a wise decision because it provides dependable transportation without the high purchase cost of a new car. A pre-owned car loan allows you to purchase the desired vehicle without making a large down payment. You can spread out the expense of the car in affordable monthly instalments, ensuring that it does not upset your financial planning.
When it comes to financing a used car, the interest rate that you pay has a big impact on the entire loan cost. Securing a competitive interest rate not only results in lower monthly payments but also in significant savings over the life of the loan.
Lenders such as Bajaj Finance offer used car loans with flexible repayment tenures and competitive interest rates, making them an excellent financing option for borrowers.
Let’s look at five tips that will help you secure favourable interest rates on a used car loan:
A significant down payment not only reduces the loan amount but also shows financial responsibility to lenders. This can be very helpful in obtaining a competitive interest rate. By putting down a higher initial deposit, you are basically minimising the lender's risk, which may result in a more affordable interest rate offer.
Before beginning your used car search, create a budget that includes the overall cost of the vehicle, including taxes, fees, and potential maintenance costs. Keep in mind that a greater down payment can result in a smaller loan amount, which can lead to a cheaper interest rate. Avoid pushing your budget too far, as this may result in increased interest rates or financial difficulty in the long run.
Your credit score is one of the most important factors lenders check before approving your used car loan and determining interest rates. Before applying, make sure to check your credit history. Your credit score indicates your ability to repay the debt. A higher credit score suggests less risk, which might result in a lower interest rate. A CIBIL Score of 720 or higher is optimal for obtaining a used car loan with low interest rates.
The debt-to-income ratio is a measure used to evaluate your ability to pay your EMIs on time. It is an important component for lenders to consider when determining the used car loan interest rate. If your debt-to-income ratio is high, your loan application may be denied, or you will be charged a higher interest rate.
Like any other loan, the interest rate on your used car loan is heavily influenced by your income. Lenders evaluate your income to determine the best interest rate for you. If you have a consistent income and a reliable employer, you can get a more affordable interest rate. Your employer or the organisation for which you work is also important in deciding the interest rate.
Following the above-mentioned tips can help you secure the most favourable used car loan interest rates. Bajaj Finserv Used Car Loan with a high-value finance of up to Rs. 77 lakh is an excellent way to fund the purchase of your used car. You can acquire asset-based financing for up to 100% of the car's value with this loan.
You can also make use of the used car loan EMI calculator available on the Bajaj Finserv website to calculate your EMIs instantly. Check your EMI payable by entering your preferred loan amount, interest rate, and loan tenure. The used car loan EMI calculator will display the total interest amount along with the EMIs for the tenure.
Visit the Bajaj Finserv website to apply for a used car loan today.
Share
Tweet
