When it comes to auto loans, it doesn't get any better than a zero-interest loan. With zero-interest loans, the borrower is only required to repay the principal. As a result, it's easy to save thousands of dollars on the purchase of your vehicle. To open the door to savings, learn more about how to boost your chances of getting one of these cost-effective auto loans.
High Credit Score
Zero-interest loans are at the top of the food chain when it comes to auto loan options. Naturally, these loans are only offered to borrowers with similar characteristics. One of the first disqualifying factors is a credit score that is in the low to average zone. To qualify for this type of loan, you need to have a score that is rated very good to excellent.
Make sure you check your credit before you apply for the loan to ensure your scores are where they need to be. Whether it's paying down debt or correcting errors, do what you can to improve your score before you apply.
Right Buying Time
You can also improve your chance of qualifying for a zero-interest loan by knowing when to buy. Zero-interest loans are available year-round, but there are certain times of the year when auto loan companies will offer these loans as an incentive to buy.
Typically, these incentives correlate with car-buying trends. When sales are low, these companies offer these loans to help drive more customers in. During these incentive periods, borrowers who might not have qualified for these loans may have a better chance of securing these loans, to drive up sales. Research the buying trends for the vehicle you want by month to determine the best time of the year for you to buy.
Significant Down Payment
Make sure you have a sizeable down payment for your vehicle. Zero-interest loans are generally only offered to serious buyers. A buyer that comes in with a sizeable down payment, such as 20 percent, often falls into this category.
Putting down more money helps because it lowers the amount of money the financing company has to secure to cover the rest of the purchase price of the vehicle. The less risk involved in the lending process, the more likely the lender is to offer this low-cost loan option to a borrower.
All auto lenders have different qualifying criteria. However, these tips can help you improve your chance of getting this type of loan considerably. Contact a lender to learn more about the different types of auto loans.Share