A number of auto buyers these days are opting for easy vehicle financing schemes owing to their flexibility in payments. One does not have to invest an entire lump sum on the car and can conveniently pay the amount in instalments. Prospective buyers have the comfort of paying the loan instalments either monthly or annually, and the rate of interest in both cases vary largely. In case of a yearly payment plan, the annualised interest rate is applicable and is also known as Annual Percentage Rate (APR). A car loan APR in India can vary according to the provider and generally comprises high interest. Many people feel the need to lower their annual percentage rate for car loans in order to maintain their budget slab more appropriately. There are several ways through which a borrower can obtain low APR on car loan and these are listed below:
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To reduce the auto loan APR, an individual can first find out his/her credit score. The interest rates applicable on car loans are largely affected depending upon the scores people have obtained on their credit requirements. This can simply be done by contacting various credit score companies, which are available in the market.
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After one has enquired about his credit score, next step is to decide the exact loan requirements. People should borrow the sum, which will be easy to pay in instalments and won't affect their monthly family budget. Stick to a specific number and then contact various providers to know which firm offers the minimal auto loan APR.
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People can also get a low APR on car loan if they have a co-signer who has an impressive credit score with a bank. The car loan APR in India can also be flexible and timely varying as per the policies of the concerned companies. All these queries must be asked beforehand so that there are no issues of paying extra amount during the later stages.
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A notable tip to obtain low APR on car loan is to ask for the sum to be sanctioned for a shorter duration. A car loan may have duration of 36 months or 48 months depending upon the provider. Opting for short term loan can yield cost-effective and scaled-down auto loan APR.
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While deciding on car loan APR in India, people can also apply the trick of exchanging offers. If someone gets an offer with auto loan that is not required, he/she can ask the concerned company to replace it with a low APR.
The average auto loan balance for a borrower can also be reduced to a minimal figure after obtaining a low APR. The average loan balance is proportional to the calculated annual interest, instalments paid and the duration of the auto finance. If the annual percentage rate comes out to be low, then the average auto balance will ultimately be decreased. Obtaining a low APR can bring along several advantages to the borrower during the later stages of repayments. It is advised to negotiate the APR as much as one can so as to maintain his/her monthly or yearly expenses.
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