Growth in the used car market has been three to four times that of the new car market as of FY 19. One of the drivers behind this growth has been the easy availability of second hand car loans. When a borrower approaches a lender for a used car loan, the former considers certain things like rate of interest, repayment schedule, the term of the loan. Before approaching a particular lender, the borrower must shop around. The borrower must check for the terms and conditions of all the lenders to get convinced that used car loans are available at a competitive rate of interest. If the borrower discovers a lender offering a competitive used car loan interest rate, the former must calculate the total cost of financing the preowned car. If the benefits outweigh the cost, then the borrower must go for it. There are several lenders that offer low second-hand car loan interest rates.
Here are some handy tips to get used car loans at a low-interest rate:
Before checking for the lender who offers the lowest rate of interest for a second-hand car, the applicant must understand the components that increase the rate of interest for a particular automobile.
Rate of Interest of Lenders in Your Vicinity
The applicant must research extensively for the used car loan rates within her vicinity. If different evaluation officers from various banks finalize a different rate of interest, then the borrower could accept credit from lenders who offer low used car loan rates. The applicant must check whether they are ready to finance the maximum LTV. while arranging the remaining amount accordingly. If putting together the loan cost and the amount in hand, offers a better option to the applicant then she must go ahead with it. It is better to avail of such a loan than the lender who is ready to lend 95% of the car value with a higher rate of interest. The overall cost of the car will be higher in that case.
Check For The Hidden Charges
At first glance, a second-hand car loan interest rate may appear low. There may be hidden charges which the applicant may not know initially. When the repayment schedule starts, the borrower will feel these charges being added as a component in the loan EMI that is being serviced. Therefore applicant must ask several queries and check for the components of EMI thoroughly. The applicant must never jump to conclusions that a particular bank offers low used car loan rates.
Any Special Offers
The borrower must ask this question to her lender to get a wonderful deal for the used cube car. If there are any offers like festival offers or anniversary offers, it is the best time to make use of it. The borrower will get a lower used car loan rate.
Borrow If You Can Afford
The applicant must get quotes from different lenders and calculate the exact amount that goes to the principal and interest. If there is some extra cost that is being added to the EMI, then the applicant must be clear about that as well. The applicant must sit down and manually calculate the actual rate of interest. The applicant should be budget conscious and compare the used car loan rates of different banks. If the second-hand car loan interest rate is affordable and leaves some money in the bank, then the applicant must go for it. Otherwise, the applicant must postpone the idea to own a pre-owned luxury car.
In short, getting a lower used car interest rate is not difficult. The borrower has to research and put in efforts to find out the most suitable one.