5 Things To Know About Used Car Loan
The world has become a different place due to the pandemic. Public transport is no longer safe, a lot of offices have not opened, and there is complete uncertainty about how and when things will return to normal. If you used public transport in the past, it is best to avoid it for some time now.
Many cities have yet to fully open mass transit systems like local trains and buses, but even if they do, it might not be a safe option. This is a good time to invest in a used car for your commute. If you are worried about the funds, apply for a used car loan.
Buying a car should not give you financial stress. There are several lenders in the industry who offer a loan for the purchase of a used car. The car should be less than eight years in age. Before you head to the second hand car market, here are five things you need to know about the loan.
1. Eligibility: Different lenders have varying eligibility criteria for the loan. You can compare the same online and then proceed with the loan application. The basic eligibility criteria require the age of the applicant to be above 18 and have a valid driving license. You also need to have a stable source of income. The loan is available for every brand and type of car in the industry.
2. Down payment: The lender will not offer a loan for 100% value of the car. This means you will have to make a down payment for the loan to be approved. Most lenders have a minimum requirement of 20% to 30%. You can make the minimum payment or if you have excess funds on hand, you can make a higher down payment. You need to attach proof of down payment when you apply for the loan.
3. Interest rate: Always compare the interest rate before you sign on the loan documents. Since it is a used car loan, the interest rate will be slightly higher as compared to a new car loan due to the risk associated with it. Choose a lender that offers the loan at low interest rate so that your EMI will be low and monthly outflow will be manageable.
4. Application procedure: The application procedure for the loan is simple and hassle-free. You can make an online application. Simply fill up the application form and submit documents as necessary. You loan application will be processed without any delay.
5. Documentation: You need to provide identity proof, address proof, income proof, ITR, down payment proof, and the documents of the car you wish to purchase. You also need to provide two passport sized photographs with the loan application.
Keep these five things in mind before you apply for a used car loan. The loan is available at a high amount and has flexible repayment tenure. You can make the repayment while you use the car. The loan will be approved in no time and you will be able to bring your new car home. Timely payment of EMIs will help build a strong credit score, which will make it easier for you to get a loan approval in the future. Visit the pre-owned car market and take a test drive before you choose a car. Do not rush the decision and pick a car that has run less miles and is in good condition. Prepare a repayment schedule to ensure timely payment of dues. Keep in mind the monthly income and outflow before you agree on an EMI amount. Enjoy your new car without any financial burden!
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