Car loans are as old as cars themselves. As cars are available for every price point, every prospective buyer in India is leaping towards auto loan to own a car. Once you find your dream car, you will start shopping for the right lender to offer you the right vehicle loan and comparison sites like Logintoloans.com will serve your purpose at best in these scenarios. Whether you have taken a car loan earlier or going car loan for the first time, it is important to know different ways to save money on your car loan. An auto loan is chosen as an option by many to avoid emptying accumulated savings, not to pay more than the cost of the car.
4 Ways to Save Money on Car Loans
Choose a lender that allows extra payments
Many bankers today are interested in offering loans to the customers because these loans are earning them interest along with the monthly instalments of principal payment. This is the reason why many lenders don’t allow you to close the loan earlier than expected. Take advantage of your good credit score to negotiate the terms with the lender in terms of early payment of the auto loan. If the lender allows you to pay to close the loan early with the idle funds, you will be able to save a good deal of money in form of interest.
No skip to payments
Keep EMI of an auto loan as your priority in your monthly budget. Skipping repayment of the auto loan due to any uncertainties will not only extend your loan tenure but also penalise with the high rate of interest on the car loan. You may also find it difficult to afford accumulated EMIs over a period of time.
Build your credit score
Keep your credit scores as high as possible to enjoy best interest rates on car loans. With high credit scores, you will stand in a position to negotiate the interest rates and better terms with the lender. One of the best ways to build credit score is to use a credit card to address your credit score and make timely payments.
Low-interest rate card
You may laugh at me saying how low-interest rate credit card will save you money in auto loans. If you have chosen to purchase a cheap car or used car, you can easily afford it with credit card limit most of the times. Take the help of the comparison sites and sign up for the card that offers low APR, there are some cards that offer interest-free period for one year as an intro offer. The interest rates and other charges on these cards are high. If you manage to repay the loan within this term, none other than the credit card will be the best option for you to purchase the car.