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Car Loan Rates
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Tips on bring your car loan rates down:
You want to buy a car so that you can commute to office and other places with ease. But purchasing a car needs high amount of money. So, like many you too want to purchase a car by financing it through a car loan but are worried about high rate of interests. In that case, low interest car loan can solve your problems.
Lenders provide car loans to borrowers in the form of secured car loans or as unsecured car loans. Secured car loans help you get a large amount at a low rate of interest for a longer repayment period. Lower rate of interest is the main reason behind borrowers opting for a secured car loan. Secured car loans can be availed against any property which a borrower owns. In most cases the property is the home which the borrower pledges as collateral but some lenders also consider real estate, jewelry etc., as collateral. If you put some property as collateral then your chances of getting low car loan rates becomes higher. On the other hand unsecured car loans are provided without collateral. The lender reviews your credit history and if you meet the eligibility criteria the loan is approved to you. An unsecured car loan mostly comes with a higher rate of interest when compared with secured loans but there are many lenders who may offer low car loan rates without collateral.
Lenders offer different interest rates to different people. The rate of interest depends on the credit history of the borrower, willingness to provide collateral as well as on the negotiation. It also depends on the competition in the market. There are many lenders who offer low interest car loans to lure customers. Some exploration of the market can definitely help you avail low interest car loans. The following tips can help you avail car loans at low rate of interest:
• Know your budget: Try to determine the average cost of the vehicle you are interested in buying. This can be done by visiting the car dealer or by visiting the official website of the car maker. Once you know the approximate cost of the car you want to buy then, have a serious look on your earnings and spending. Now, find out how much you can afford as monthly installment. Financial experts recommend that the total vehicle cost including loan installment and car maintenance should not be more than 10% of your monthly income.
• Pay Car Loan Deposit: find out how much you can pay as car loan deposit. Experts
recommend that you should try to put at least 20% of the cost of the car as a down payment. The more money you pay as down payment the better it is for you as it will lessen the burden of loan on you. In addition it will also convince the lender about your financial position.
• Examine your credit history: Your credit history will show your past performance of repayments of debts to the lender. The approval of your car loan application will depend hugely on your credit score. More so, if you want an unsecured car loan. Therefore, the information furnished in your credit history should be accurate. Apply for a copy of your credit score with any of the credit rating agencies. Check your credit history and see whether, the information given is right. If there are any errors, contact the credit rating agency to rectify it at the earliest. An accurate credit score will help the lender judge your repayment capacity correctly and thus approve the loan if you meet his requirements.
• Search for low rate car loans: There are many lenders offering car loans in the lending market. These lenders have different rate of interests on which they provide car loans. Therefore, it becomes mandatory for you to search for the best deal. Visit many lenders to know the interest rates they offer. If you are unable to spend much time, take the help of Internet. There are many lenders who offer car loans online. Visit their websites and request for loan quotes. The loan quote will contain information on the amount available to you, the rate of interest, repayment period and the discounts, if any provided by the lender. Compare the loan quotes sent by various lenders and select a car loan plan which you find attractive. Apply for the loan by filling up an online application form. The lender will contact you to complete other formalities.
• Negotiate with the dealer: Now, once your car loan gets approved, you are now set to visit the car dealer, find the car you want to purchase and get the deal that satisfies your needs. Keep in mind to negotiate the cost of the vehicle before financing it. Once you settle on the price of the car then, you can then disclose the finance terms you already have got and see if they can match up with it. Car dealers generally get hefty commissions on the deal financed through them therefore; they can easily pass some of the benefits to you. Also take the following particulars in writing. What is the price of the new car if you finance your car through the dealer, what will be the APR, how much amount he will finance, the total amount of money you will be paying at the end of the loan, the number of monthly payments and the monthly installment amount If they can beat your prearranged car loan terms, then finalize the deal else find other car dealer.
Following the above tips can help you cut down your car loan rates easily. If you still feel that reducing your car loan rates is a bit tedious task then, you can take the help of loan counselors and financial experts. They will analyze your credit history and financial position and will guide you in availing low rate car loans. You can also take the help of brokers in the lending market. These brokers have access to many lenders and by charging some fees they will help you get low rate car loans. Other Articles |
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