Decrease APR on your Car Loan
Taking a car loan is a godsend, as it gives you the opportunity to pick a vehicle that meets all your requirements. The annual percentage rate (APR) is the amount you have to pay as interest every year. To ensure you save significant sums of money in the long run, bringing down this figure is essential. Here are four tips which will help decrease the APR on your car loan:
A great way to ensure you don’t have to pay high APR is to refinance your current car loan. When you apply for this option, the lender will pay off your existing auto loan, and replace it with a new one. Depending on the terms and conditions, you can decrease APR or the length of the tenure, allowing you to make sizeable savings.
Get a co-signer
If you haven’t taken a car loan from a lender, then you must get a co-signer to help you out. The co-signer acts as a guarantor, assuring the financial institution that you will repay the loan. Also, if you fail to make the payments on time, the co-signer will be held responsible. The advantage is that if he/she has a great credit score, it will bring down the APR considerably.
Take a look at all your options
One technique which will decrease the APR on your car loan is to take a look at all the available options. For instance, if you want to pick up a specific vehicle, find out if you can choose one with lesser options, to decrease the amount you have to borrow. Also, as different lenders offer varying rates of interest, you may stumble across one financial institution whose car loan payments fit your budget.
Work on your credit score
If your credit score is not up to the expectations of lenders, they will levy higher APR on your car loan, to mitigate the risk. Due to this reason, you should take the necessary measures to increase your credit score. Make sure you start repaying all your loans on time, as it shows the lender you are reliable. Also, you can open a new credit card and make small, yet affordable purchases and pay them off regularly.
Follow these four tips to decrease the APR on your car loan!