Remember These Points Before Availing Second-Hand Car Loan

Personal Loan

Last Updated on March 12, 2024 by admin

Purchasing a brand-new car, even with the aid of financing in the form of loans might not be economically viable for many. A more affordable option is to invest in a pre-owned car, featuring the same specifications. Financing the purchase of second-hand vehicles, in recent times, has been streamlined with dedicated credit facilities extended by financial institutions. Second hand car loans offer financing required, in part or whole, to fund the purchase of a pre-owned car.

Nonetheless, availing a pre-owned car loan too requires borrowers to be watchful about certain factors. Thus, undertaking an informed decision is necessary for this matter.

Things to remember before availing a second-hand car loan

Here are 5 points which you must keep in mind before availing a loan for pre-owned cars:

  1. Decide your budget

Your budget needs to be set not only based on the type of car you wish to purchase, but on your ability to repay the loan as well. It would also help you know the amount of down payment you will need to make for the pre-owned car. Take your savings, spending, future liabilities into consideration while fixing the budget.

  1. Ideal tenure

Lenders usually allow a tenure ranging from 12 to 60 months for the repayment of pre-owned car loans. While choosing a shorter term can drain out your savings, a longer tenure would increase the overall interest payment. Thus, choosing the right tenure is essential.

  1. EMI liabilities

The monthly instalments which you will have to pay during the tenure must be an amount which would not strain your finances. You can use an EMI calculator, available on a lender’s portal to know the exact estimates of your loan repayment.

  1. Documentation requirements

You will need to submit some essential documents for verification before the lender approves your loan request. Documents serving as identity proof, address proof, employment details, etc., must be kept handy.

  1. Eligibility criteria

Second hand car loans are usually available against basic eligibility parameters. This includes criteria like:

  • An applicant needs to be aged between 23 and 55 years.
  • An applicant must be a residing Indian citizen.
  • Must be employed with an MNC, public or private company or own a business with at least 3 years’ vintage.

You must also keep your credit score in consideration before applying for this loan. Applying without checking the CIBIL score is one of the mistakes to avoid while availing a personal loan for second hand cars. You should go ahead with the loan application if your score is 750 or above. A low score could result in loan rejection, lowering your credit score further.

Some NBFCs offer credit options like a personal loan for used cars for better financial assistance. Through such loans, individuals can acquire up to Rs.25 lakh as advance. Such low interest personal loans also extend benefits like instant approval, convenient tenure, Flexi-loan facility, etc.

Financial institutions like Bajaj Finserv also provide pre-approved offers that can make availing these funds faster and more streamlined. These offers can also be availed on financial products like business loans, credit cards, etc. You can check your pre-approved offer by entering your name and contact information.

Make sure to assess the affordability and value-for-money aspect of second hand car loans offered by various lenders. Compare the loan features and benefits before you apply for a personal loan for used cars online to maximise your benefits.

Read More: 3 Top Tips to Choosing the Right Commercial Finance Provider

Previous articleThe Integration of Shoppable Instagram With Shopify Store – What Is It and Its Benefits?
Next articleWhy you should hire car rental services
Sophia Anderson
Sophia Anderson is a finance writer and blogger with a passion for helping people improve their financial literacy. With over 5 years of experience in the finance industry, Sophia has worked with individuals, families, and small businesses to provide financial advice and guidance. Her expertise includes budgeting, saving, credit management, and debt reduction. Sophia is dedicated to breaking down complex financial concepts into easy-to-understand language and empowering her readers to make smart financial decisions. She is a frequent contributor to financial publications and has written extensively on topics such as personal finance, investing, and financial planning. Sophia's mission is to help people take control of their finances and achieve financial security and freedom. When she's not writing, Sophia enjoys hiking, practicing yoga, and reading personal finance books.