Most people research the car models, test drive all the cars they shortlist and eventually narrow down on the car they want to drive out of the showroom. But ask them if they know how to get a car loan and the majority of them will hesitate slightly. It isn’t that tough though, you need to follow a few basic guidelines and that’s about it.
Just like the things to know before buying a car, you need to be savvy with a few aspects on financing your purchase. The first place to begin is the down-payment. Simply put, it is the sum that you, the buyer shall pay towards your car purchase, before the financer chips in with the rest of the amount. The higher this amount in percentage terms that you’re willing to fork out, the lower the total interest you’ll end up paying in the long run.
There are two schools of thought when it comes to settling the question of how to get a car loan at the best interest rate possible. Some say that a fixed interest rate gives them the peace-of-mind they need, while others say that in the present financial scenario, a floating interest rate works for them.
Watch that credit-rating! This is one of neglected aspects of the things to check before buying a new car. Applicants that have a proven track-record when it comes to servicing their loans on time will always get a better interest rate (among other benefits) from their financer. On the other hand, if you happen to be lagging behind on the payments of any existing borrowings, then it is best to pay those up first. Much as we hate to say this, the new car isn’t going anywhere. It can wait. Bring the existing borrowings back on track before you go about creating new ones.
Lastly, read the fine-print carefully. Ensure that all your queries are clarified to your satisfaction. All the negotiation, from the interest rate, to the borrowing terms, has to happen before you sign the agreement. Once that’s done, things are out of your hands. So tread with caution there. And, that’s that. If you’ve done it correctly, there’s nothing to worry. So congratulations and here’s to plenty of happy miles on the road!
