Getting a car loan can be the second most expensive decision after the mortgages. These loans come easily but they often carry a monthly instalment to be paid which high. One should try all the possible ways to cut down the cost associated with car loan.
Because of today’s economic condition and inflation, everything is available at price which is out of reach of many people. It is also a fact that our pay checks are not increasing at the same pace! In such a condition, it is common to find that our expenses are immense but the pay check is small in its comparison. If one plans on owning a car, then it might prove to be a pretty expensive affair at prlog.org. Finding the best deal for buying a new car is a pretty tough task. And until and unless you are filthy rich you would be needing a loan for it. Thus settling for a good loan is a very important thing!
Getting loans with regards to your car loan is not at all a difficult task. One can find several lenders out there offering multiple options to meet your requirement of financing a car. There are many who could offer online loans to you, getting which is a lot simpler when compared with any of the traditional loans. No matter how easily and quickly you get a car loan, it is a fact that these loans are to be returned to the lender with an interest added to them which makes it an expensive affair. Owning a car requires regular maintenance which again requires a lot of money. One should therefore try and use different methods to see that they cut down the cost of the car loan by any means possible. Here are certain ways which can help you in the process.
1. Review your credit standing
Credit scores play a very important role while getting a loan for purchasing a new car. A person with good score will get a good bargain in the rate of interest and also can lay down their own terms and conditions in front of the lender. Whereas a person with bad credit score will have to shell out extra bucks in the name of high interest rate. So, it is advisable to maintain a good credit score.
2. Borrow an amount which serves your purpose well
If you are funding a major portion of your car purchase then it is advisable not to go for a loan for a small amount of money. You must put a cap on your loan amount. For example try not to take a loan for an amount less than $5000. For amount less than that it is better to save some and buy a vehicle without incurring any debt. The banks earn money by the interest they charge on their loan. These short term loans are offered for a short period which does not give banks enough time to earn hefty sum as interest. So they charge interest at higher rates in order to compensate their loss of money. Hence, it is better to not borrow and instead save for yourself!
3. Take to Refinance
Refinancing your loans is a better option in the present economic conditions. Anyone who owns a house must know that those mortgage rates have dropped down considerably. Thus mortgaging your property and taking a loan against it makes a lot of sense. Many people are unaware of refinancing their car as an option. It reduces the amount of interest you pay and thus making your monthly repayments also less! Cars are assts which depreciate with time, thus you must pay off your loan quickly in order to enjoy the perks of a loan free car.
4. Keep your options open when you visit a dealership
Sometimes the car dealers set you up with different financing companies in order to get you a loan to fund your car. You should not settle for those lenders. Instead you should research on your own. Try to find a lender who offers lesser rate of interest than others and the terms and conditions of payment should also be feasible enough for you. In case you find the lender suggested by your car dealer feasible enough for your needs then only go for it. However, never take a decision till the time you are satisfied with all the terms and conditions laid out by the lenders and also clear about the repayment terms and the flexibilities offered on the same.
5. Try the leasing option
Leasing of a car is not a very wise idea. You would be making monthly repayments and at the end of the day you won’t be the owner of the car. But on the other hand if you are someone who changes your car every few years then leasing can prove to be a good option for you. If you don’t want to bear the extra charges of keeping a car for longer period than desired even then this is a good option. The repayment price is lower than loan and you just have to pay the sales tax along with monthly repayment amount in almost all the states. Along with this you will not have to bear depreciation charges on full cost of vehicle. Under leasing you pay a cost for using the vehicle and not burying it.
Leasing though is not feasible for people who want to own a vehicle.
6. Buy a Cheaper Car
Go for a cheaper car instead of buying an expensive car which would exhaust all funds and leave you bankrupt. In America people have this habit of purchasing things way out of their budget. This is what the statistics say. So if you are one of them then immediately change this habit if you don’t want to see yourself neck deep in debt.