5 major things that can reduce the cost of your future car
Cars are essential for a modern lifestyle. It gives a sense of freedom to travel on your terms. It assures safety and mobility.
Here are a few major things that can reduce the cost of your future car:
Credit score :
A credit score ranges between 300 and 850. A CIBIL score above 750 can fetch you a great deal of loan. A bank or lender will take a peak interest in your credit score as it mirrors your creditworthiness. If you have a poor credit score, you might not get approved for the loan, and if you get approval for the loan, then the bank would charge higher interest from you on a relatively small amount of loan. So if you want low interest car loans, keep your credit score clean.
Loan size and down payment:
The down payment has an inverse relationship with the car loan. The smaller the down payment, the larger the amount of the loan. Paying the maximum amount as a down payment will lower the burden of a huge loan from your head. The down payment also affects the loan tenure, so you can pay the loan easily and fast if the loan amount is less. A larger down payment makes you look less risky in front of the lenders so that you may get qualified for low interest car loans.
Duration of loan:
It has a significant effect on interest rates. A short loan tenure gives low interest car loans, and a longer tenure would give you a loan at a much higher rate considering the amount of risk involved
Income to Debt Ratio:
It is an important tool used by lenders or banks to qualify a person for approval of a loan. It refers to the amount of money you owe to others. The lenders will view this amount you have earned in a specific time, which will help them realize the time you will need to pay them back. Therefore, it is essential to keep your slate clean as the more debt you have, more interest rate will be charged to you.
Compare various lenders
Before opting for any car finance offers, compare the interest rates of different lenders and wait for festive offers to get the ideal car loan.
Am I eligible for the car loan for pensioners?
Pensioner car loans are available for the people receiving the loan. The purpose of car loans for pensioners is to provide them with financial assistance to buy a car at their retirement stage. Types of pensions include age, disability, and parenting pensions. In addition, the government, defense, and family pensioners above 76 can avail of the loan.
How much can a pensioner of a car loan borrow?
The amount you can borrow varies from lender to lender, and it also depends on the individual's creditworthiness. If you can save money from your pension, then your credibility can improve with the lender.
Here are a few factors that determine the amount of money you can borrow:
1)Employment Status
You don't need to be employed to be eligible for a car loan for pensioners, but a supplementary income is an add-on. So the lender might give you a bigger loan based on your supplementary income.
2)Interest rate:
If you are a pensioner and have some assets, then the lender might be willing to take a higher risk on you and give you a loan at a lower rate.
Conclusion:
You can easily get a low interest car loan by increasing your creditworthiness, and a car loan for pensioners highly depends on the assets they own and their secondary income other than the pension.
Source URL: https://www.freedomcars.com.au/about
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