With a notable shift in consumerism and lifestyle, the demand for a second-hand or used car loan witnessed a positive trajectory. To fund the purchase of revamped cars, various financial institutions extend used or second-hand car loans with exclusive offerings. Innovations in banking such as online platforms and AI-powered risk assessments are making used car loans faster, more convenient, and potentially accessible to a wider range of borrowers. The affordable pricing is the primary reason for heightening the organised car segment.
Besides, using used car loans encourages intending borrowers to finance their dream car without a financial burden. Nonetheless, before applying for a used car loan, you need to know the benefits before making an informed decision.
3 benefits of using a second-hand car loan to finance your dream car
Getting an old car loan is way simpler and more convenient now. Lenders usually check the applicant’s basic eligibility and documentation and the car. Upon verifying the credentials, the amount is credited to the account within a few hours.
Here are some of the benefits explained about a used car loan:
1. Substantial loan amount
Usually, second-hand car loans come with a considerable loan amount. One can avail of a loan value of up to 90% based on the car’s valuation in the market. Of course, it relies on several other factors, but there is a possibility of obtaining a substantial amount.
Alternatively, you can also go for a pre-owned car loan from leading financial institutions to finance the purchase of your dream car. With flexible tenor, doorstep assistance, and quick approval, one can ensure a flawless borrowing experience.
2. Interest rates
Generally, the interest rates of a used car loan are higher due to the higher risks involved for both buyer and lender. This is because the engine’s condition is not assured, besides the absence of a warranty and other associated factors. Hence, lenders regard used cars as risky concerning the resale value.
In such cases, individuals can choose a personal loan as an alternative to purchasing their dream car. Such credit facilities from renowned financial institutions like Bajaj Finserv have reasonable interest rates and no end-use restrictions. Hence, individuals can use the funds to finance accompanying expenses.
3. Flexible loan terms
A second-hand car loan allows individuals to decide on loan amount and tenor. Besides, one can also choose the repayment option at their convenience. On the other hand, applying for a personal loan for used cars online will allow borrowers to avail of sizeable loan amounts at competitive interest rates, flexible tenor, and other benefits.
Moreover, to ensure a hassle-free repayment, you can determine your used car loan EMIs by using an online personal loan calculator. This online tool will help you to know the payable EMIs beforehand based on your chosen loan amount, interest rate and tenor. When considering a used car loan for your business, carefully factor in the monthly payment to ensure it aligns with your “Managing Business Finances” strategy. Furthermore, with the assistance of this online instrument, you can alter the values and choose the right personal loan tenor that works for you.
Eligibility and documentation of a personal loan
Like any credit, lenders always go for a thorough check-up of the applicant’s financial background. However, the eligibility parameters vary across lenders, some of the basic parameters remain the same, and they are –
- The applicant’s age should be between 21-67 years
- CIBIL score must be 750 and above
- Must be an Indian citizen and employed in a reputed MNC or government, or private organisation
- The monthly salary requirement varies depending on the job location
Note that one can negotiate with the lender with a healthy credit score for better personal loan interest rates.
This is why it is essential to know the ideal CIBIL score for personal loans and apply after adopting certain financial activities such as making timely payments, avoiding applying for multiple credits, maintaining a certain percentage of credit utilisation ratio, etc. By doing this, you can enhance your CIBIL score and eligibility for future loans.
Apart from meeting these qualifying parameters, individuals are required to produce some basic personal loan documents that are listed below:
- KYC documents
- Bank account details
- Employee ID card
How to apply for a personal loan for used cars?
To know how to get a personal loan from leading financial institutions in a few simple steps, read along –
Step 1: Tap on the ‘apply online’ option to open the loan application form
Step 2: Input a few details to verify the OTP sent to your mobile number
Step 3: Submit your KYC and income details
Step 4: Select the loan quantum you wish to borrow
Step 5: Submit your loan application
Upon verifying your provided credentials, one of the representatives will call you for further loan proceedings.
Besides flexible eligibility and minimal documentation, borrowers can also avail of pre-approved offers on a range of financial products such as business loans, personal loans, credit cards, etc. Such offers significantly minimize the hassle of extensive documentation and accelerate the loaning procedure. Therefore, check your pre-approved offer by submitting your name and contact details. Hence, it is essential to know about the benefits and specifications of a used car loan to reap its advantages. However, you can also consider availing of personal loans for used cars as an ideal alternative to funding the purchase of your dream car conveniently.