Whenever we speak of buying a new car, there are a number of factors that may affect your car deal. Your car loan and its interest rates gets place among the top five factors. There are a number of factors which determine your car loan rates for new as well as used cars. Here, we are going to give a brief look at some of the primary factors with respect to car loan interest rates.
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Credit Score: Be it a bank or individual firm, your lenders will always take a peak interest in your credit score. In case, of used car loan rates it plays the most important role in finalizing the deal. It is the mirror of your credibility, so always keep it clean.
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Income Is To Debt Ratio: Another car loan interest rate determining factor, it mainly refers to the amount of money you owe others. Your lenders will then view the amount of money you have earned in that specific period. It mainly helps the lender in realizing the time you might need to pay back. So, better keep your slate clean as people sitting there are all set to nitpick and raise your interest rates.
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Loan Size And Down Payment: The amount of your down payment bears indirect relationship with your car loan interest rate. Higher is your down payment lower will be your interest rate. However, for small cars and used cars, the norms might be slightly different.
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Age Of the Vehicle – One of the most important points with respect to used cars. If your car is brand new, the rates will be comparatively lower. However, if we are talking about a used car, the interest rate would bear direct relationship with your car’s age. Higher the age higher will be the interest rate.
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Duration Of Loan: Your loan duration also have a significant affect over interest rates. Longer the payback period, higher will be the interest rate and vice-versa.
