There are various means of transport in India, but a car is one of the best options for a small family. Having a car is a dream of every person, but buying one is only possible for some due to its high price. In such a case, second hand car finance is a great option to own your car without worrying about the cost. The used car loan is so beneficial for every borrower as they can easily buy a car even if they do not have enough money, as they can get their vehicle on loan and repay the loan amount for a specific period.
Numerous benefits and features of used car loans make them more popular and well-liked. If you are also planning to buy a second hand car but do not have much savings, you can opt for second hand car finance. This guide will help you to understand the benefits and features of a used car loan so you can easily avail yourself of its benefits.
What is Meant by a Used Car Loan?
Buying a second-hand car is easier and cheaper than buying a new one; still need to save a considerable amount to buy a pre-owned vehicle. However, to reduce the burden of paying huge amounts to buy a car, various financial institutions and banks offer second hand car finance to their users so everyone can own their vehicle. A second hand car loan is so attractive as the loan provider provides it at a reasonable interest rate. It comes with a specific repayment tenure of up to 7 years so a borrower can gradually repay their loan amount.
Some loan providers allow used car loans at approximately 100% of the car’s value with hassle-free procedures, immediate disbursals, and minimal documentation, making them more attractive to borrowers. Moreover, a second-hand car’s insurance costs and depreciation rates are lower than a new car.
How to Get Used Car Finance?
Different banks and financial institutions allow used car loans offline and online. Availing of a second hand car financing is simple, seamless, and quick, as it does not require a lengthy process or heavy documentation. You only need to fulfill your loan provider’s eligibility criteria, submit various essential documents, and fill out the used car application form with the correct details. Before applying for a used car loan, you must check your eligibility criteria, including age, stable income, credit score, work experience, nationality, etc.
After checking the eligibility, you also need to calculate your used car loan EMI, as it is one of the essential elements of the loan and will affect your overall loan capability. You must choose and adjust your used car loan interest rates, tenure, loan amount, and EMI according to your requirements and affordability. After considering your EMI, loan amount, and other loan elements, you need to fill out an application form and submit it along with various documents for verification. Once the loan provider approves your loan, the loan amount will be disbursed to your bank within a day.
How Does Used Car Finance Benefit the Borrower?
While not being able to afford a brand-new car is one of the primary reasons for the growth of used car loans. With a used car loan, a borrower can easily shift the burden of paying a huge amount to the lender and repay the loan in certain installments. Besides offering the advantage of car ownership at a cheaper cost, there are various other benefits you can avail of with second hand car financing.
Save money
As compared to brand new cars, second-hand car value is lesser. Therefore, while applying for a pre-owned car loan, you are not required to take a higher loan amount. When you do not take a higher loan amount, it directly influences the EMI, which means you have to pay lesser EMIs for your loan. Thus, second-hand car loans are the best way to save money besides owning a car.
High Loan Amount
Pre-owned cars allow a high loan amount, which means you can get them for as much as you want to own a car. Although, getting a high loan amount also depends on various elements.
No Need for Collateral
With a second-hand car loan, you do not need to submit any precious asset as a security or collateral, which means there is less risk of losing your asset. However, the financial institution can charge different used car loan interest rates depending on different factors.
Minimum Paperwork
While applying for a used car loan, you do not need to submit numerous documents, as lenders allow minimum paperwork to offer convenient and quick second-hand car loans.
Flexible Terms
Second hand car loans allow flexible tenure, loan amount, and EMI so borrowers can quickly get their loan according to their loan and capability of repaying it.
Conclusion
A used-car loan is the best way to accomplish your car dream. Aside from the obvious benefits of car ownership, it also provides numerous other advantages. However, you must consider various factors such as used car loan interest rates, tenure, amount, lender, different offers, and EMI before applying for a loan to get the best possible loan.