Can one time a car loan to get a cheaper loan or is it a myth?


Can one time a car loan to get a cheaper loan or is it a myth?


The growing competitive car loan market has meant that banks have monthly targets to achieve. Since banks have month end targets, in case the bank is falling short of their target they would rather offer a cheaper deal to the customer rather than watching him go to a rival bank or NBFC. So expect discounted interest rates to relaxed terms and conditions as well as a waiver of loan processing fee in case you time your car loan well.


Hi Reba,

If it is the month end, year-end or if a new model is round the corner, you could get Car Loans at lower interest rates. During these times, car dealers speak to banks to relax terms so that they can sell cars before the month or year closes. In cases where a new model is coming up, car dealers will want to sell off the old model as soon as possible. So, you can expect to get better Car Loan terms.
Before jumping into other factors that can influence your Car Loan, let’s start with the basic (and probably the most important of them all)—the loan amount. It directly depends on your savings and how much you can pay as down payment. It’s advisable to make a heavy initial payment instead of borrowing a huge amount. Why? Because it can significantly reduce your financial burden in the future and give you enough time, energy and resources to focus on other essentials of your financial security like a house, your retirement planning, building an emergency fund etc. Now’s when all your savings can come to your rescue. They can save you from the wrath of a long-term loan and tons of EMIs. Other important factors that decide your loan amount are the car model you’re aiming for and whether you’re going for a new or a used car.

Loan Tenure
While some people prefer short-term loans, some like to go for the long-term option. The major difference between these two types of people is that the former lot is okay with paying heavy EMIs, while the latter likes going easy on the EMIs. You can decide whether to opt for a long-term or a short-term loan option based on your current financial situation and other financial commitments. For instance, if you already have an Education Loan to repay, maybe a long tenure Car Loan makes more sense for you. But if your finances are pretty set otherwise and the only burden you have is that Car Loan, maybe you should go for the short-term option.

Interest Rate
One of the most crucial factors to consider while choosing the right Car Loan offer is the rate of interest. This can vary depending on a couple of factors like the risk associated with the borrower, the bank (different banks offer different rates) etc. You need to look for the best interest rates before finalising any Car Loan offer unless you want to waste your money paying unnecessary interest.

Looking for a Car Loan? Click here.

BB Expert



To get the best deal on your Car Loan make sure you follow these tips:

  1. Ensure that your Credit Score is good and you have a good credit track record. If you find that your Credit Score isn’t up to the mark, start working towards building it up before applying for a Car Loan.

  2. Negotiate on the vehicle’s price. Car dealers are always looking to make a sale so there’s a good change you may be able to bring down the price of the vehicle.

  3. Research well before taking on a Car Loan. Don’t just take on the first loan you come across. Find out what banks offer the lowest rates, what the fees and charges are if any, what the repayment tenures are etc.

  4. As far as possible, opt for a loan with a shorter tenure and make as much of a down payment as possible. This will help you manage your repayments and pay off the loan quickly.

Looking for a Car Loan? Click here.

Team BB