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WHAT ESSENTIALS TO REMEMBER BEFORE APPLYING A USED CAR LOAN?


Undoubtedly, the popularity of pre-owned cars has rapidly increased over the past decades and has in fact exceeded the number of brand new cars being bought every passing year. However, a car is an ever depreciating asset but many people find it financially good to go for second hand vehicle rather than investing in a new car. As everyone cannot rustle up the funds needed to own their own vehicle, so purchasing a car of your own choice has become easier with the incredible range of used car loans available in the market.

In order to make your purchase financially sound, many banks and NBFCs in lending market are offering used car loans that have been specifically tailored to suit your needs. This loan scheme make it possible for individuals who prefer to buy a second hand or pre-owned car over a brand new car to actually get their hands on their asset of desire. Many of the pre-owned car dealers help you to avail a used car loan at hugely discounted price as well as you can "Apply For Used Car Loan" with fantastic options.

Features of Used Car Loan: The used car loans are somewhat different in features as compared to the new car loans that are available in the market.

  • Usually, the loan amount for used car loan is offered about 60% of the on road price which may be increased to 80% in some cases. 
  • The maximum age of the pre-owned car should not exceed 3-5 years at the time of purchase.
  • The processing fees would be charged as in some small percentage on the used car loan as compare to new car loan.
  • The repayment period for used car loan is not extendable beyond 3-5 years.
  • One of the major benefits of second hand car loan is that the EMI for it may be lower than that of new car.
  • The interest rate may be different for different lender as per the terms and conditions.

  • The down payment shall not be less than 20% in case of pre-owned car.

Essentials to remember before applying a used car loan: There are some essentials to be borne in mind of borrower while taking a used car loan.

  • Generally, the documentation linked to used car demanded by non-banking finance companies for approving the loan is much lesser as compared to traditional lenders.
  • You may have a chance of bargaining in case of second-hand car loan in various aspects such as down payment amount, rate of interest, tenure and processing fee.
  • You can also waive off the prepayment penalty in case of pre-owned car loan as compared to new car loan.
  • As the tenure for used car loan is shorter, one has to be prepared for higher EMIs in this car loan.

The idea of pre-owned car loan is getting popular among people either they "Apply For Used Car Loan Online" or offline, who do not want to spend additional money just to own something that is unused earlier.


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