Applying for a car loan and getting its approval is not at all hectic. Before you even expect, your loan amount will be transferred to your bank account. It is that simple! But, before applying for a loan, you need to be aware of certain things and take certain steps, so that the interest rate of the loan gets lowered.

Factors to Get Lower Car Loan Interest Rates

Are you ready to take a loan? When you decide to apply for car loan, you must be ready with certain things and must look into these following factors:

1. Mentally ready – Far before you apply for a loan, you should be mentally prepared with the make, model and trim of the car. If too much time is wasted in making the decision to select the car model after applying for a loan, the interest rates may go up. So, to get lower car loan interest rates make your decision beforehand.
2. Financially ready – This is the most vital factor of all. Your income, the car price, and the EMI should match and maintain a parity. If anything goes up or down, your affordability will decrease, and the interest rates will increase. So, make sure, the car price is affordable for you and the EMI can be easily payable from your monthly income.
3. High credit score – This is one more important factor that decides your interest rate. If your credit score is low, that is below 750, the interest rate will be much higher. So, it is always suggested to improve your credit score  And if you have a credit score above 850, you may get much lower interest rates.
4. Ready with documents – To get a car loan you need certain documents. Make sure you have all the documents with you. If you miss any documents, that will be count as a flaw and the interest rate will increase.

So, if you are ready with all these, the interest rate will surely be going to reduce. 

What are the car loan eligibility factors?

The eligibility factors will vary from one country to another and on the basis of your profession.

Salaried person car loan eligibility

• Must be an employee of private limited companies, employees from public sector undertakings, including central, state and local bodies
• Must be a minimum of 21 years of age while applying for the loan, and no older than 60 till the end of the loan tenure
• Must be employed for at least 2 years
• Must earn minimum salary of Rs. 3 lakhs per annum
• Must have a telephone/post-paid mobile

Self-employed person car loan eligibility

• Must be a self-employed sole proprietor in the business
• Must be a minimum of 21 years of age while applying for the loan, and no older than 65 till the end of the loan tenure
• Must run business for at least 2 years
• Must earn minimum salary of Rs. 3 lakhs per annum

Once you know the eligibility factors, you just need to know how much car loan EMI you must pay. You can easily know about it by car loan EMI calculator, just enter the details required and know the monthly EMI amount you have to pay.

Which is better- lower car loan EMI or lower car loan interest?

It is very tricky question. You need to have a clear understanding about the entire calculation of EMI, so that you get benefitted, not the bank.

The best way to do so is with the help of car loan EMI calculator. The factors that are involved in calculating EMI are principal amount, interest rate, and number of years. If you make a large amount as downpayment, then the principal amount will decrease. Once the principal amount is low the EMI will be low. Secondly, even if the principal is high, if you qualify on the eligibility and have approved all factors of low interest, then you will enjoy low interest rate.

Thirdly, time frame can be a vital factor to choose whether you want low EMI or low interest. If the time period is long, your EMI will be low, but you will count more interest.  If the car loan tenor is low, your EMI will be high, but you will have to pay less interest. So, it is up to you, which one you want to opt for.

Once, you sort out these things, you can easily apply for a car loan online at a lower interest rate.