Aside from being a long-held desire, owning a car is a significant financial commitment for anyone with disposable means. Purchasing is challenging for people in the middle income bracket. Auto-financing options have streamlined the vehicle-purchasing procedure, which amounts to a quick car loan even for used vehicles. That’s why we have discussed some of the tips while getting finance for second hand car.
Basics of Finance for Second Hand Car
Finance for second hand cars is also known as used car loans. It is a loan obtained particularly to purchase a used vehicle. Because payments can be spread out over time, this option is more cost-effective than acquiring a car in full.
However, loan amounts for used car finance in India are lower. But keep in mind that this is not a bad thing. Because of the reduced interest rates connected with used-vehicle loans, used autos are an excellent option for newer, more expensive ones. As a result, payments will be reduced over time.
Tips to get finance for Second hand Car
Good Credit Score
Higher credit ratings result in reduced interest rates on loan amounts. Therefore, keeping an impeccable credit record is essential, demonstrating your reliability in making timely payments on EMIs and other credits.
Set Your Budget
Your ability to make a purchase is directly related to your ability to control your spending and save money. If you take out a car loan for a large sum of money and then find yourself unable to make the monthly payments, you could be in a sticky financial situation.
Check Your Eligibility
Since purchasing a vehicle is a long-term investment, evaluating your budget for the month(s) is important before signing up for auto finance and deciding to purchase a vehicle. Spending more than 10% of your monthly salary on a car is not a good idea.
Compare Various Dealing
Wait until you’re ready to buy an automobile. Do your homework carefully instead. Using the internet, you can easily compare the costs and features of several vehicles from different dealers. Find the ones that meet your spending plan to make a good purchase.
Get loans from a trusted financial institution
Even if recognized banks in India don’t provide you with a loan for a second-hand car, then opting for non-banking financial organizations is a good idea as they pose competitive and appealing bargains; you could receive the best value loan with flexible tenure and a low-interest rate.
Used Car Loan Eligibility
You must meet the bank’s eligibility requirements to receive a loan from that bank. Eligibility requirements are not standardized among financial institutions. Below are some examples of common requirements:
Applicant’s age
Applying for a car loan often requires a minimum age of 21. Most financial institutions have a maximum age limit of 65 years for loan applicants. You might not qualify for finance if you’re too young or old. The maximum age is determined to be within legal employment and income range.
Employment
Employees, self-employed professionals, proprietorships, partnerships, and corporate companies are eligible.
Income
To get approved for a used car loan, you must make at least Rs. 1 lakh yearly. Income criteria range from bank to bank. Not having enough of the required income will get your loan application denied. Once again, financial institutions seek assurances that they will be repaid. A guaranteed source of income to cover monthly EMI payments is, thus, essential.
Customer Relationship
Your bank relationship will affect vehicle loan applications. Many banks favor salaried customers with salary accounts. If you currently have a personal loan with the bank, you may enjoy reduced interest rates and processing fees on your car loan.
Conclusion
The availability of finance for second hand cars has enabled almost anyone to accomplish their lifetime dream of owning a vehicle. Comparing loan alternatives from several lenders is must while looking around for the best-used auto loan. We hope that after reading the above mentioned tips you could make a sound decision while getting a second hand car loan.
