With the financial instability caused by the current pandemic, consumers are opting for more financially visible options when it comes to buying cars. That is why the demand for used cars has increased significantly over the past two years, as everyone is being careful with their savings.
Most car users are taking used car loans to buy their dream cars and yet be able to manage their finances. Getting a used car is the best option to own a car without touching your savings. Most lenders offer up to 80% to 90% of the vehicle’s value as a loan for a repayment tenure of up to 60 months. With affordable used car loan interest rates, you can make easy and timely repayments.
Here are the tops benefits of taking a used car loan:
Higher loan amount
As mentioned earlier, you can get up to 90% of the used car’s market value as a loan. However, you must meet the lender’s eligibility criteria. The benefit of it is that you can get your dream used car that can cost you as high as Rs. 20,00,000/-. Before applying for a used car loan, it is imperative to assess your needs and repayment capacity. Make sure that you can repay the loan amount with interest without putting any burden on your monthly budget.
Attractive interest rates
The used car loan interest rates are low and affordable. You can secure an interest rate as low as 7.5% depending on your income, credit score, current financial obligations, etc. It would be wise to use a used car loan EMI calculator to determine your eligibility.
Flexible loan terms
Getting a used car loan enables you to choose a loan amount, interest rate, and repayment tenure based on your needs and preferences. You have the luxury of choosing your method of payment. You can pay your EMIs through online payment, post-dated cheques, auto-debit family, or electronic clearance service.
Collateral-free loan
A used car loan is a collateral-free loan, which means that you do not need to pledge your asset with considerable value as security. Instead of having something as collateral, lenders consider your income and credit report to determine whether or not you can repay the loan amount without any defaults.
Easy application procedure
The process of applying for a used car loan is easy and hassle-free. Since the entire process is online, you can fill in your application and upload your documents from the comfort of your home. All you need is a smart device, internet connectivity, and a sufficient balance in your bank account.
Minimum documents required
The best part about a used car loan is that there is minimum documentation required. Unlike other loans, you do not have to follow a lengthy documentation process. You will need to furnish your identity, address, and age proof. To prove your income, you will need to submit your salary slips, bank statements, ITR, and form 16.
Prepayment facility
Another benefit of a used car loan is that you can choose to prepay your loan if you have any extra money in your pocket. This way, you can get rid of the financial burden and save money in interest. However, it is worth noting that the terms and conditions of repayment vary across lenders in India. Some lenders offer prepayment facilities after a certain period, while others do not have requirements.
Summary
If you do not want to redeem your savings or investments, applying for a used car loan may be the best option to manage your finances. However, before applying for a loan, make sure to assess your needs to make an informed decision.
