WHAT THINGS TO REMEMBER BEFORE TAKING A USED CAR LOAN?

It is the matter of fact that pandemic is not over yet so the threat in people still looms large. However, most of the people are facing the financial crunch during the lockdowns and have limited budget. People started commuting to their workplace and to be safe, they want to own their vehicle but with limited budget, people are opting to buy pre-owned cars.

There are several things that one needs to remember before he/she "Apply For Used Car Loan" which are listed below:

• Model of the car: The first thing to check before purchasing a second hand car is the model of the car which you would like to purchase and whether its available or not. If that car model suits to your budget, you should visit the dealer and check the internal and external condition of the car.

• Availability of funds: Once you determine about the car model, and then start looking for the funds. There are number of funding options available for pre-owned cars in the market. Many banks and NBFCs provide used car loan to individuals seeking a used car. Online car aggregators also have partnerships with different banks and fin techs that assist you in instant financing.

• Valuation of car: One has to consider so many factors while valuing the car. It may include number of kilometers driven, clear title of the car, accidents or modifications done to the car etc. you also have to ask for service history and odometer records. It is important to understand how the price of car is evaluated while keeping these entire factors in mind.

• Right loan quantum: Once you evaluate the price, lenders ask for certain amount of the estimated value of the car as a down payment. Lender would fund up to 75-80% of the market price of the car. It is good to keep balance between down payment and loan amount to avoid any debt burden.

• Interest rate: The rate of interest depends upon condition of the car, customer profile and his/her credit history. The used car loan tends to have high interest rate as compare to new car loan. Lenders would also charge you processing fees whether you "Apply For Used Car Loan Online" or offline which could range between 1-2% of the value of the car.

• Check the documentation: You need to check the required documents before the deal can go ahead and it may include registration certificate, car insurance, no objection certificate, pollution under control certificate etc. if these documents come in handy then there would be great chances to get your loan application approved easily.

• Repayment structure: As mentioned earlier, the interest rate on used car loan is higher so every individual wants to clear off the loan as early as possible. Therefore, always keep in mind to enquire about repayment fees if repaid early. It is your responsibility to borrow that much only which you can pay back easily and regularly. It goes for both used car loan and new car loan.