When it comes to car loans, a low monthly payment is something that many car buyers focus on. However, it’s important to understand how to get the lowest monthly car payment without paying really high interest rates or taking out a loan for longer than you actually need. We have a few ideas for you on how you can get lower monthly payments on your car loan and save money in the process.
Keep Your Credit Rating High
Lenders look at your credit score to determine the interest rate you’ll be offered on your loan. When you keep a good credit rating, you’ll be offered a better interest rate, which translates directly into savings on your monthly payment. With a better credit score you can reduce the overall term of your loan, so you’ll have fewer monthly payments overall but still be able to keep them relatively low.
Make the Biggest Down Payment You Can Afford
The more cash you put upfront for your car purchase, the lower your monthly car payment will end up being. Before you apply for financing, take stock of how much you are able to put towards a down payment. By organizing a larger down payment you’ll be setting yourself up for lower payments for the length of your loan.
Check Options With Payment Calculators
You can use a payment calculator before you apply for financing to compare how your monthly payment changes depending on the term of your loan and at various interest rates. This research gives you a better idea of the type of payment you’re likely to face and the ways you can reduce it by shortening the length of your loan.
Getting low monthly payments on car loans can be as easy as checking your options before signing on the dotted line. With a bit of advance planning, you can save in the long run.