India has a huge market for second-hand passenger vehicles. It witnessed exponential growth in the last few years, with a steady increase of 15% of the overall market value year-on-year. Currently, there are at least 22 used cars being sold for every ten new vehicles, outpacing the total sales figure by a considerable margin or at least 4,00,000 automobiles.
Increasing demand for private transport, lowered second-hand market prices and the availability of used car loans have fuelled this substantial growth in recent years.
Several financial institutions offer credits to eligible borrowers interested in used car ownership. Customer-friendly terms, affordable rates, and simple eligibility criteria make the entire process a hassle-free experience. Moreover, you can also follow some simple steps to improve your creditworthiness. It will help you avail used car loan and benefit significantly from the advance.
Useful Tips to Get The Best Second Hand Car Loan
1. Do Thorough Market Research – Carefully go through the terms and conditions of all the financial institutions that offer such credits before you decide on any particular lender. Different lending organisations might levy different loan terms for their customers. Carefully consider important factors like tenor, documentation, eligibility, etc. You can also use various online tools like EMI calculator before you apply for a loan.
2. Apply With Good Credit Score – Make sure you have a good credit score when applying for such loans. Financial institutions refer to your credit rating to measure your creditworthiness. A score of 750 or better signifies that you are financially responsible, with a history of timely repayments and zero defaults. Lenders emphasise on credit score while disbursing such unsecured loans. You may even benefit from a larger sum as used car loan without income proof if you have a high credit rating.
3. Check The Purchase Price – The offered price of a used vehicle should be well within your financial limit. Ideally, your used car loan should comprise 80% to 85% of the price of the vehicle.
The best car loan for second-hand purchases should provide ample amount of money to ensure you do not come across any difficulty. Companies like Bajaj Finserv provide personal loans of up to Rs. 25 Lakh that you can utilise to purchase a used vehicle. They also bring pre-approved offers that make availing such credits quick and hassle-free. These offers are available on different types of financial products, including unsecured advances like personal loans and business loans, secured credits like home loans, etc. You can check your pre-approved offer by sharing only some essential details like name and phone number.
4. Know The Rate of Interest – Personal loan interest rate is one of the most crucial factors a borrower should consider before applying. Your loan EMI is directly related to the interest rate, a higher rate will attract a larger EMI which can strain your finances. you can calculate your monthly EMI with the help of online loan calculator. Check what each financial institution have to offer, also remember to consider the additional charges like processing fees, secure fees, and statement charges along with personal loan interest rates.
Opting for a credit that comes with the lowest interest rate may not always prove beneficial. Such advances may often charge a hefty sum as additional fees, which can increase the total loan amount by a significant margin.
Following these above mentioned factors will help you avail the best loan to purchase a second hand vehicle. Apply for a used car loan to a lender that offers considerable loan amount at the most borrower-friendly terms to help you repay the debt without straining your finances.