Save precious cash on your car loan through home collateral

Feb 7 2010

Did you know that you can get better car loan terms from independent and stand alone companies that are not attached to any specific institution or brand?
Authentic car dealers and franchise owners would not be able to offer you such terms since they would depend on your credit score and also work closely with reputed banks and other financial institutions. Moreover, their business model works such that they are able to make better returns on car financing rather than pure car sales.
One good way to save money on the car loan is to get it at a rate of interest that is quite low. That can be done by offering your home as equity or collateral against the car loan. Not only do lenders find this suitable for them, you can also deduct the interest amount from your tax liability. Of course, you need to ensure that the tenure of the car loan does not exceed 36 months as anything longer would be counter productive.
If however, you cannot avoid a longer tenure, then you need to opt for the fixed-home rate car loan. In this arrangement, the rate of interest is low and fixed as well as long as you are regular with your repayments.

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