Getting used car finance is extremely easy and hassle-free in India. Most lenders allow you to apply online, i.e., submit a paperless application.
While different lenders may have different loan eligibility criteria and varying terms, the basic procedure remains the same. Submitting a paperless application saves your time and makes the entire process real-quick.
Finalizing the Car
The first step for a secondhand car loan is to finalize the brand and model you wish to own. You have two options here – you can either buy the car from an authorized dealer of a specific brand or purchase one from a pre-owned car market. If you have made up your mind about the brand of car you wish to own, the dealer will be able to help you.
Moreover, if you are unsure and want to keep all your options open, consider visiting a pre-owned car market.
You need to shortlist one or more cars that you like and ask for a test drive in each. Remember, never purchase a car, be it new or pre-owned, without taking a test drive. When you drive the car, you can learn more about its condition in terms of the engine, brakes, and overall performance.
Checking Used Car Loan Eligibility
To be eligible for a used car financial service, the car you choose must not be more than eight years in age. In fact, you should finalize a car after checking your eligibility for a used car loan.
Every lender will have varying eligibility criteria, so you must be aware of that of the lender you have picked. You can get this information on the website of the bank. If you meet the eligibility criteria, proceed with the application.
The basic eligibility criteria require you to be above the age of 21, hold a valid driving license. and have a consistent source of income. You can either be self-employed or have a well-paying job.
How Big should be Your Car Loan?
You now need to come up with the amount of loan you need. It depends on the market value of the used car and down payment you need to make. Remember, no lender offers 100% finance for such purchases. Therefore, make sure you do not rely on the loan to make the down payment for the car.
Finance for used cars (opens in a new tab/window) is usually available up to 60% of the market value of the car and the balance is your down payment. You can make a higher down payment if you have excess funds in hand.
Before you make an application, compare used car finance rates offered by different lenders and choose a lender that offers the lowest interest rate. It will not only reduce the amount of each EMI but also make repayment easier.
You can use the used car loan EMI calculator to estimate the amount of EMI payable. The calculator is available online and free to use. You are required to provide the loan amount and tenure to get a quick estimate. Change your inputs until you reach an optimal output and be practical when it comes to the EMI amount because it will be your monthly outflow.
Submitting Used Car Loan Application Online
Once you have decided on the car you wish to own, made the down payment post settling upon the lender, it is time you submit your used car loan application online. You simply need to fill up the application form and upload the documents.
You should be required to provide a copy of your identity proof, income proof, address proof, latest salary slip(s) or bank statement, and documents of the car you wish to own each. Moreover, you will be required to attach the proof of the down payment you made for the purchase.
Some lenders take up to 24 hours to process your loan application while some take even less. Remember, a good credit score builds your credibility in the eyes of your lender and helps quickly approve your loan application. Once your loan application is approved, the amount should be transferred to your bank account and you will be a proud owner of a four-wheeler of your choice.
Repaying Your Loan
You need to prepare a repayment schedule to ensure timely repayment of the loan. Consider used car loan interest rates when you prepare the schedule. You can also prepay the loan if you have funds in hand and your lender allows the same. It will help save on the interest payable in the long run.
Therefore, it is very important to thoroughly understand the terms and conditions of the loan before you sign on the dotted line. Ensure that there are no hidden costs associated with the loan.
Used car finance can make it possible for you to own your dream car without disrupting the budget. You do not need to postpone the purchase; nor do you need to use your emergency funds for the purpose. You can own any car you wish to with a loan.
Lenders across the country offer used car loans at lucrative terms and make it easier for you to apply for one. The application procedure is quick and hassle-free. You do not need to visit the branch office of the lender to submit your loan application. Once you choose the right car, simply submit your application from the comfort of your home.
Guest Author: Neha Verma | Image Source: Debt(dot)org