Used Car Loan
Due to the social distancing norms of the COVID-19 Pandemic, having a car has become a necessity these days. It brings with it a sense of freedom and assured safety from contracting the current deadly virus. Used car sales in India are shooting up due to lower prices and depreciation rates.
If you do not want to cause stress on your finances, you can take a used car loan to own your dream car. You can get up to 90% of the vehicle’s value as a loan at affordable used car loan interest rates offered by Muthoot FinCorp. However, the interest rate depends on factors like your income, credit score, loan tenure, etc.
If you wish to know how to reduce your used car loan interest rate,
Here Are The Top Three Tips That You Will Have To Keep In Mind While Applying For a Used Car Loan:
1- Make A Bigger Down Payment
As you get up to 90% of the vehicle’s value as a loan, you will have to pay the remaining amount as a downpayment. For instance, if your preferred used car costs Rs 250,000/-, and you get Rs. 225,000/- as a loan, you will have to pay the remaining amount of Rs. 25000/- as a down payment.
A golden piece of advice would be to pay a bigger down payment while applying for a used car loan. The bigger the down payment, the lower will be your loan amount, and you may get lower second-hand car interest rates on lower loan amounts.
2- Check And Maintain a Good Credit Score
Your credit score is a three-digit number provided by the Bureau of Credit which contains information about your credit history, credit behavior, etc. It helps the lenders determine whether or not you are a creditworthy borrower. Most lenders require a minimum CIBIL score of 750.
So, before applying for a used car loan, make sure to check your credit score. If you happen to have a lower credit score, take the necessary measures to improve your CIBIL score. The closer your credit score to the 900 CIBIL score range, the greater your chances of reducing your used car loan interest rate.
3- Loan Tenure Matters
Your used car loan tenure has a direct impact on your used car loan interest rate. If you opt for a longer loan tenure, you will have to incur higher interest. The reason is that when borrowers choose a longer loan tenure, there is a high chance of defaulting on loan repayments, due to which a higher used car loan interest rate is levied just to justify the risk.
If you have the budget, it would be wise to go for a shorter loan tenure. Your equated monthly installments may increase, but you may end up getting a used car loan at a lower interest rate. You can use a used car loan interest calculator to choose an interest rate based on your monthly budget and repayment capacity.
A used car loan is the best option to buy your dream car instead of using your hard-earned savings & investments. Your used car loan interest rate directly impacts your monthly budget. Before applying for a loan, your priority should be to avail of a lower interest rate. You can reduce your second-hand car loan interest rate by following the above-said tips.
You can also apply for the Muthoot used car loan that ensures a higher loan amount, affordable interest rates, and flexible repayment tenure. The best part is that there are minimum eligibility requirements to secure used car finance. The hassle-free documentation process makes it convenient. Muthoot FinCorp offers Used Car Loans via one of its group companies named Muthoot Capital Services Limited, through more than 3600 branches across India. You can call us on 1800 102 1616 or visit www.muthootcap.com for more details.