A car is a dream of many because of the style statement and social esteem that it provides to the people. But mostly focus goes on the interest rate charged by the lenders on a car loan. Well, the interest rates can be either fixed or floating. With specified, the rate of interest remains the same throughout the tenure of a car loan. Besides, the lending rate changes based on the changes brought in by the lenders, either in its marginal cost or the base rate.
Benefits of low interest car loans
Make it easy to buy a car- As many banks provide 100% finance of showroom price, you don't have to wait long to buy your dream car.
Flexibility to choose the tenure- Any bank offers car loans for tenure upto 7years. You have the flexibility to choose the tenure at your convenience.
Loan for buying a used car- These days, many banks offer loans on used cars. Besides, the interest rate will be higher than the interest rate on new car loans, and the ratio will be lower than the new car loan.
The interest rate can be negotiated- Just like a home loan, car loans also have the flexibility to negotiate the interest rate with your lender if you have a good credit score.
No guarantee required- You don't have to put any guarantee to avail of the car loan as your vehicle will act as a security with the bank. If you missed making the payment, the bank has the right to collect the vehicle and sell it off to recover the funds.
Flexibility to choose the payment mode- You can choose to pay through post-dated cheques or use the auto-debit facility where you compare monthly installments that will be automatically deducted from your bank accounts.
Flexibility to choose the fixed or floating interest rate option- You can choose the type of interest rate, whether floating or fixed. The interest rate will depend on the kind of interest rate you're choosing.
With the boost in the Indian economy, the younger generation's car purchasing power has been increased. Everyone wants to improve their quality of life by owning branded things and dream cars. Owning a car has become a necessity these days. For making your lifestyle easy and simple, a car is the best option you can choose. Although there are many avenues to obtain financing for your dream car's purchase, due to certain facts, your car loan application can get rejected. One of the main reasons is having a bad credit score. It can reduce one's chances of loan approval by the banks. Before applying for a car loan, make sure you do research online to get a better deal. Whether it's a new car or a used car, you'll get a low interest rate car loan to save up on interest payments.
Factors that impact your car loan interest rate
It’ll depend on your credit score. You can negotiate with your lender for the lowest interest rate.
The car loan tenure will decide your total interest outgo and the interest rate too. Generally, banks charge higher interest rates on shorter tenure loans and lowest interest rates on longer tenure loans.
Car age and model will also be one of the factors considered while deciding the interest rate.
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