So you’ve decided to purchase a second-hand car for daily commutes. Already narrowed down the model and make, including how you’ll insure the same. But if you’re taking a second-hand car loan to fund your purchase, you also need to ensure that your loan is affordable. One way to do so is to look for competitive interest rates. Here’s why.
You probably decided to purchase a second-hand electric car to save money without compromising quality. If so, you should try and get a competitive used car loan interest rate since the interest rate on your loan will directly affect the loan EMIs. In fact, the lower your interest rate, the lower your monthly EMI will be. So, shop around for affordable loan offers before agreeing to one.
Let us now understand how you can do so.
How to compare interest rates?
Before we talk about how to compare second-hand car loan interest rates, let us discuss a critical aspect of your loan first.
The total cost of your loan does not depend solely on the borrowed principal and the interest component. Other charges, such as processing fees, stamp duty charges, and more, are also included.
So, it’s important you compare the fees different lenders are charging in addition to the interest rates they are offering. With proper research, you can secure a competitive interest rate that will help you save money in the long run. Plus, if other charges are also low, all the better!
Comparison is not the only answer
Comparing different used car loan rates is just one of the many ways to find the best finance for your dream electric car. There are other ways to further improve your chances of getting the best deal, as discussed below:
- Maintaining a high CIBIL or credit score is essential for securing lower interest rates. After all, your credit score defines your creditworthiness to the lender. In the lender’s eyes, a high score makes you a low-risk borrower, so they may be willing to offer you a lower interest rate. To maintain a high credit score, check your credit report regularly for discrepancies, avoid credit defaults, avoid taking multiple loans, and more.
- If you are employed in a reputed organisation, it can help you secure a lower interest rate. This is because your lender may find your employer’s credentials reassuring of your repayment capabilities.
- Another way is to opt for a shorter tenure if you can afford it, so your overall interest payable comes down substantially.
- Finally, you can pay a higher down payment, which will decrease the borrowed principal, thereby reducing the loan EMI.
Over to you
As you can see, finding the best deal for your pre-owned electric car isn’t difficult. All you need to do is perform due diligence. Once the loan is finalised, just make sure to use a used car loan EMI calculator to calculate your monthly EMI amount to plan a repayment budget. And, you’re good to go!