To buy a new car from a car dealership, applicants need to have a credit score of at least 700 or above. Today, many dealerships offer cars through loans at low-interest rates. However, to avail of these offers, applicants need to have a good credit score. Here are some tips to easily get a car loan from a car dealership:
- Search and compare deals – To buy a car at reasonable rates, it makes sense to browse and compare the best deals. Comparing the interest rates of lenders is equally important before making a decision.
- Knowledge of EMIs – Before taking a car loan from a dealership, it is important to know about the EMIs and Principal + Interest components. Borrowers must also learn about penalty interest, annual maintenance, EMI bounce charges, etc.
- Periodically check credit score - A credit score in the range of 700-900 is considered good and can help in getting a car loan at low interest rates. It is important to periodically check the CIBIL™ score to ensure that it is accurate. In case it is low, one must immediately start working towards achieving a good credit score.
- Choose lower EMI for longer tenure - Limiting monthly EMI to 30-35% of total income is advisable. Depending on one’s credit score, it is possible to negotiate for a longer loan tenure with the car dealership.
- Alternative payment options – Car buyers can either go for a large down payment or a large loan with lower interest rates. This has to be thoroughly planned before approaching the car dealership.
A brand new car from a car dealership can be affordable especially one has a good credit score. It reflects good credit history and the dealership may be willing to negotiate loan terms in such cases.