Several Indians avail a used car loan to finance the purchase of a pre-owned car. With the rate of used car purchase increasing annually, financial institutions offer several benefits to individuals procuring a used car loan. The 4 important things about used car loans include – 1. Value of the pre-owned vehicle Lenders consider the value of the vehicle while approving a used car loan. The mileage, the number of transfers between owners, the condition of the exterior as well as the interior determines the value of the car. NBFCs issue used car loans only if the vehicle has a decent market value. In addition, the interest rates of the loan depend on the model of the pre-owned car. 2. Document requirements of the car A used car should have valid documents under the name of the latest owner for the approval of a used car loan. The registration certificate (RC) of the car, insurance papers, and NOC from the previous owner need to be submitted to the lender. Individuals have to possess valid KYC documents, income certificates, and driving license for loan approval. 3. Tenor of the loan The loan tenor depends upon the age of the previously-owned car. In case the car is older than 5 years, the lenders impose shorter tenors thus increasing the EMIs. Individuals should use a loan EMI calculator to manage the repayment schedule during the tenor. 4. CIBIL score of the applicant An applicant’s CIBIL score must be at least 750 or higher to secure a used car loan. Higher CIBIL scores indicate the repayment capability of the lender, thus making a used car loan easily accessible. Owing to the above conditions, individuals can opt for a personal loan. Fulfilling the personal loan eligibility is also easier. Additionally, buyers don’t have to make a down-payment when using these loans to buy a second-hand vehicle. Additional Read: Important Things You Must Know About a Used Car Loan
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AuthorAman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management. |