Getting a car loan can be confusing. We believe that nothing should come between you and your dream car. So, we have listed down 5 easy steps to get a Car Loan:
Step 1: Shortlist a car:
Do you already have a car in mind? Or are you still finalizing the brand and model? To search and compare cars, visit banks and different websites.
Once you have identified the car, you are ready to start the car loan process.
Step 2: Check eligibility:
The easiest way to check your eligibility is to use the online car loan eligibility calculator.
To get started, it is recommended to opt for a car loan of up to six times your yearly income. However, the eligibility criteria may differ based on city, income, occupation, etc.
Step 3: Calculate the loan amount, the term, and the EMI:
How much funding do you require? How long? How much money can you manage to pay each month?
One simple method to do so is to utilise a digital EMI calculator. To determine your loan EMI, simply input the loan balance, period, as well as interest rate.
Step 4: Submit an application and accompanying documentation:
You may now apply for a loan online or offline at your nearby location.
Maintain a supply of evidence of income, identification, and residence.
After receiving all required papers, the bank will authorise your car loan in less than 20 seconds.
Reserve your car:
Once your loan has been approved, you may visit the seller and spend the suggested financing amount of the car's cost. The bank will then transfer the loan into your account. You can proceed with the payment as well as booking. When this is completed, you will be able to take your car.
In this context, if you want to get a second-hand car loan at the lowest interest rate, there are 3 tips that you can follow-
a-Increase Your Down Payment:
You can borrow 90% of the car's price and pay the rest as a down - payment. For example, if your selected second-hand car price is rupees. 250,000/- and you acquire Rs. 225,000/-, you would have to spend the remaining rupees. 25000/.
The golden rule is to make a larger down payment when asking for a second-hand car loan. Larger down payment will decrease your loan amount, which may result in cheaper interest rates on used car loans with smaller loan sums. In this way, you will get the lowest rate loan.
b-Monitor and Maintain a Positive Credit Score:
Your credit score is a crucial thing to remember when you want to get the lowest rate loan. Your credit rating is a 3-digit number that the Bureau of Credit gives you. This number includes details about the credit record, credit behaviour, and other things. It assists lenders in determining your creditworthiness as a borrower. Most lenders want a CIBIL rating of at least 750.
Therefore, before asking for a secondhand car loan, verify your credit rating. If you have a poor credit score, take the required steps to raise it. The more your credit rating is near 900, the more likely you are to get a lower second-hand car loan interest rate.
c-Loan Term Is Crucial:
This means that how long you take to pay off your second-hand car loan affects the interest rate that you pay on that loan. If you choose a lengthier loan term, you will have to pay a higher interest rate. The reason for this is when buyers choose a lengthier loan term, there is a greater danger of failing on loan instalments, prompting lenders to charge a higher secondhand car loan interest rate to compensate for the risk.
When you have financial stability, it is prudent to opt for a smaller loan term. Some of your monthly payments might go up, but you could get a secondhand car loan with less interest. You may use a secondhand car loan interest calculator to determine the appropriate interest rate for your loan depending on the monthly income and ability to repay.