A used car loan can be utilised to buy a great used car. Low-interest used car loans are available with up to a seven-year payback term. Some lenders will lend up to 100% of the car’s value. Most banks and non-bank financial institutions (NBFCs) provide used car loans. Both self-employed individuals and salaried workers can apply for a used car loan.
Used Car Loans – Features and Benefits
- Long repayment tenure.
- The process to apply for the loan is simple and can be completed online.
- The insurance costs and depreciation rates are lower when compared to a new car.
- Minimum paperwork needs to be submitted.
- Certain banks and NBFCs offer flexible repayment terms.
Documentation
ID Proof
- Pan card
- Aadhaar card (with DOB)
- Passport
Address Proof
- Electricity Bill
- Latest Utility Bill(Gas bill, Water bill, House tax)
- Telephone / Mobile Bill
- Passport, Voter Id
- Aadhaar Card, Driving License
- Purchase Agreement
- Rental agreement, Bank Statement
Advantages of Financing a Used Car
1. Maintain liquidity by applying for a used Car Loan
Buying a vehicle in a lump sum can burn a hole in your pocket. You should always have sufficient money available. For that reason, it is better to finance when buying a used two-wheeler.
You won’t need to pay a lump sum. This will ensure that you will have sufficient reserves in your hands for any emergencies.
2. Get value for Money
A used two-wheeler will do the same job done by a new two-wheeler while being inexpensive. By taking a used used Car loan, it will be more affordable for you to buy a used two-wheeler. Not only that, the lump sum can be invested in various other things.
3. Improve your Credit Score
Your CIBIL score decides whether you will get a used used car loan or not. By financing a used vehicle and repaying in time, you will be improving your credit score.
This means that you will be able to get a pre-owned used card loan easily in the future. You can easily get business, home, and car loans in the future by improving your credit score.
How to Get Financing for a Used Car?
- Creditworthiness
Financial lenders check your CIBIL score to decide whether to offer you a loan or not. A CIBIL score is decided based on your bank transactions, borrowing, and repayment history. If you have a good CIBIL score, you can easily get a loan.
Most importantly, if you get financing for a used used card and pay the installments on time, your CIBIL score will get better. This will help you get financing in the future.
- Compare the Interest Rates
It is important to conduct your research before availing the loan. You should compare the interest rates of different lenders and see which lender is offering the best rates.
However, be careful of the hidden charges, such as documentation charges, loan processing charges, etc. Go for a trusted lender with the lowest interest rates.
- Service quality
This is a significant factor. You want quality service from the lender. You should be able to apply for a loan quickly. Next, select a lender that needs minimum documentation, disburses loans quickly, and is transparent.
Taking out and repaying a loan takes some time, and you will need transparency and high-quality service from your lender.