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Blog
2 mins Read | 2 Months Ago

Tips to Reduce your Car Loan EMI

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Buying a car is a milestone and if the Car Loan EMI is a cause for worry, let us assure you that there are various ways to pay the monthly instalment comfortably. Simply follow these suggestions and reduce your EMIs. 

1. Go for a bigger down payment

A down payment is the amount you pay upfront when buying a car. As you bear a part of the total price of the car, the amount you need to borrow as a loan reduces substantially. The interest rate of the loan is assessed basis the principal amount a customer borrows. The greater the loan amount, the more is the interest and your Car Loan EMI keeps shooting up.

It is therefore a good idea to pay a larger amount as down payment and reducing your Car Loan EMI while saving more in the long run.

2. Select loans with a long repayment tenure

When you go for a longer loan tenure, the entire due amount gets equally distributed over a longer time period in turn reducing the monthly instalments. However, selecting a long-term loan also means you’ll have to pay interest on the outstanding debt for a longer duration. Thus, you need to be extremely careful before you extend the loan tenure.

3. Take loans from your existing bank

If you’re already a customer of a trusted bank, avail a loan from the same bank. A favourable standing with your existing bank can increase your chances of getting a lower interest rate on the Car Loan. For instance, if you already have a Savings Account or an ongoing loan with ICICI Bank, you will be eligible for Pre-approved Car Loan offers. 

4. Negotiate with the bank to get a lower rate

A good standing with your bank puts you in a position to negotiate with the bank and get a lower interest rate on the loan. Banks might be willing to reduce the rates for present customers to ensure brand loyalty and get more customers on board.

5. Switch to a new lender to avoid high interest rates

If you’ve already borrowed a loan from a lender at a high interest rate, switch to a different lender with reasonable interest rates. For instance, if your existing bank is charging a Car Loan interest rate higher than what’s prevailing in the market, opt for a Car Loan Balance Transfer to ICICI Bank.

Once the interest is reduced, the Car Loan EMI decreases. Before switching, take note of all the charges that your present lender is levying to let you transfer the loan.

The endnote:

If you’re gearing up to buy your dream car, consider applying for a Car Loan online with ICICI Bank. You can also talk to the bank’s representative to know more about the EMIs, loan tenure, and so on. Buying a car does not have to be difficult anymore!

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