With the current financial instability, buying a used car from your savings is not a wise decision. It can put a burden on your pocket during contingencies. In such cases, you can apply for used car finance to get your dream car without compromising your finances. It enables you to secure up to 90% of the vehicle’s market value as a loan. With affordable interest rates and flexible repayment tenure, you can repay your loan without constraining your monthly budget.
However, it would be wise to assess your needs before applying for a used auto loan. You must choose a loan amount that you can afford to repay with your monthly salary. You will need to repay your loan within the stipulated EMIs to avoid higher interest rates and other penalties.
Benefits of opting for used car finance to buy your dream car
A used car loan comes with a host of benefits that you can avail of to bring your dream car home.
Higher loan amount
The best part of a loan amount is that you can secure up to 90% of your preferred used car’s value as a loan, regardless of the price of the car. It means that if your used car costs Rs. 500,000/-, you can get up to Rs. 450,000/- as a loan. You will have to pay the remaining 10% as a down payment.
Keep in mind that opting for a higher loan amount leads to higher interest rates. Lenders charge a higher interest rate on higher loan amounts due to the risks involved. So, assess your financial situation before applying for a loan amount. Choose a loan amount you can easily repay with interest.
Affordable interest rates
It is worth noting that used car finance comes with affordable interest rates, which enables you to make timely repayments without constraining your monthly budget. However, the interest rates depend on factors, such as your income, credit score, current financial obligations. If you wish to secure a lower interest, you will need to convince your lender that you have a stable income. Also, you must maintain a minimum CIBIL score of 750 to negotiate better terms with your lender.
The best part about a used auto loan is that you have the luxury of choosing your loan amount, repayment tenure, and interest rate. With the help of an EMI calculator, you can determine a suitable amount based on your needs. Besides, you can choose a payment method based on your convenience. You can pay through post-dated cheques, online payment, or electronic clearance services.
Another benefit of used car finance is that the entire process of submitting your application is online. It means that you can apply for a loan from the comfort of your home. Also, there is minimum documentation involved. You will need to furnish a valid identity, address, and proof. As with income, your salary slips, ITR, and form 16 would be required.
The eligibility criteria to apply for a used car loan are a bare minimum.
- You must be an Indian citizen
- You must be either a salaried person or a self-employed individual.
- You must be at least 18 years old at the time of application or 65 years during the maturity of the loan.
- As a salaried individual, you must earn a minimum salary based on your lender’s policy.
- As a self-employed professional, you must show a minimum net profit based on your lender’s policy.
SHARE WITH FRIENDS