Car loans transformed the perception of the Indian consumers, especially the middle-class, and paved a way for the growth of automotive industry. Several banks, finance institutions and automakers offer car loans in India at very low interest rates. Over 80% buyers get car finance in India as it’s quite a convenient way to purchase an expensive vehicle. However, the monthly EMI could be a big problem for buyers who are tight with their budget. The first thing that buyers look for is to lower their car loan EMIs. Here are few tips to get cheap monthly car payments.
Round Up Your Payment: By paying a monthly car payment in round figures will help you get rid of your loan sooner. It’s a simple and effortless technique to knock off your car loan term, even without paying extra money.
Make One Extra Payment a Year: Many of us don’t have enough cash flow to make a big chunk of the payment ever year to get a reduction on our interest rates. But we should try paying an extra loan payment on yearly basis. You can use work bonuses, tax refund or cash from savings for this.
Avoid the Skip Payment Option: Some car loan lenders might encourage you to skip monthly payment once or twice a year. However, this will increase your loan by a month or cause additional interest. Skipping monthly payment 4-5 times, throughout loan duration, can add 6 months to your car term.
Refinance Your Loan: Refinancing loan is the most popular technique to get a better interest rate. It’s like replacing an old loan with a new car loan at better terms and interest rates. In long-term, the minimum cost of refinancing might be worth thousands, depending on the loan amount.
Buying: You can buy an expensive car at lower EMIs by expanding the loan term. But, eventually you will pay more due to interest rate.