09 December 2024
Two in five consumers, about 44% of them, prefer buying second-hand cars as per data presented by YouGov. While many reasons have contributed to the popularity of buying used cars, the top advantages include lower prices, base taxes and registration costs. Not to forget, the advantage associated with the car already having undergone steep depreciation.
That's not it. The lending market is dominated by great financing options for used cars, more about which we'll speak today particularly focussing on second-hand car loans, types of car loans, the benefits of and steps involved in availing a used car loan, the difference between a used car loan and a new car loan, before ending with a checklist you cannot miss.
There are 3 types of car loans in India. A new car loan, a second-hand car loan, and car refinancing. Banks and NBFCs provide these types of car loans.
You can buy a new car straight from the showroom with a new car loan. Banks charge lower interest rates on this loan. In this loan, you need to make a downpayment of 0 to 10%. Repayment period on this loan is a maximum of 84 months
A used car loan helps you buy a second-hand car without paying the full price upfront. Instead, you pay monthly EMIs (Equated Monthly Installments).
You'll typically need to make a down payment of 10-20% of the car's cost. To qualify for this loan, your CIBIL score should be 650 or higher.
Tip: Applying for a used car loan with an NBFC is easier and faster, requiring fewer documents. You can apply online or offline based on your convenience.
Car Refinancing allows you to take a new car loan to replace the existing one. Car refinancing provides lower interest rates and better loan terms.
If you want to get a second-hand car loan, you must know about the pre-owned vehicle financing benefits.
If you apply for a used car loan in India, you do not have to pay the vehicle cost in full and instead focus on monthly EMIs, which will take care of your financial planning.
As compared to a new car, the cost of pre-owned cars is lower, which means the sanctioned loan amount will be lower as well. Lower loan amount means lower monthly EMIs that is no-worry of being financially overburdened.
If you decide to buy a pre-owned car by availing a second-hand car loan, you will enjoy flexibility in the loan terms like longer repayment schedule, provision to make multiple repayments over the course of the loan and of course, down payment variations.
Once you decide to get a low-interest pre-owned car loan and pay your EMIs on time, it will improve your credit history, making it easier for you to avail of other types of loans in the future.
If these advantages interest you in exploring the pre-owned car benefits, proceed straight to this link and have the form filled out to avail of this loan.
If you want to take a used car loan, first you must research the lenders. Go for NBFCs or digital lenders who offer the best terms.
Used Car Loan Eligibility | Salaried | Business Owner/Self-Employed |
---|---|---|
21 to 65 years age | ✔ | ✔ |
Cibil Score 675+ | ✔ | ✔ |
ID Proof: Aadhaar/PAN/Passport/Voter ID/Driving License | ✔ | ✔ |
Experience | 3 yrs of work ex, 1 yr in current firm | 2 yrs of business ex |
Income Proof | 3 months’ salary slip + 6 months bank ac statements | 2 yrs IT returns + 6 months back ac statements |
Using the following table, let us understand a quick car loan comparison between new vs used car loan.
Feature | New Car Loan | Used Car Loan |
---|---|---|
Rate of Interest | Lower than Used Car Loan | Higher than New Car Loan |
Loan-to-Value Ratio | 90 to 100% of the Car’s Value | 75 to 90% of the Car’s Valuation |
Loan Tenure | Longer than a used car loan; up to 7 years | Shorter than a new car loan; up to 5 years |
Car Valuation | Invoice-based i.e. based on the on road price of the car | Relies on the age and condition of the second-hand car |
Resale Value Impact | Higher resale value due to lower depreciation in the initial years | Lower resale value due to higher depreciation |
Down payment | Requires lower down payments that is 1 to 10% | Needs higher down payments that is 10 to 20% |
If the above differentiation has motivated you to apply for a used car loan, we would like to share a few used car loan tips that can help you get your loan sanctioned just in time.
If you are looking for attractive options to own a car and not spend too much, you can buy a second-hand car by availing a used car loan India. Your focus should be on careful planning. In the process of planning and execution, you can take the help of EMI calculators to ensure the affordability and suitability of the loan you are looking to avail. Remember, atlas it all comes down to your needs and financial goals.
Recent Posts |
---|
Union Budget 2025: Key Reforms and Opportunities for MSMEs |
Used Car Loans: Meaning, Eligibility Criteria |
Unsecured Business Loan - All You Need To Know |
Business Loan Eligibility and Required Documents |
Top 5 Reasons to Get a Business Loan in India |
Collateral-Free Loans in India: How to Apply |
Types Business loan in india |
Unsecured Finance: Types, Definition, and How It Works |
How to choose the right business loan in india |
How to improve credit score quickly 2024 tips |
Business loan interest rates flat vs reducing |
Secured Business Loan |
---|
Secured Business Loan in India |
Types of Secured Business Loan |
How to apply for Secured Business loan |
Eligibility Criteria for Secured Business Loan |
Document Required for Secured Business loan |
Unsecured Business Loan |
---|
Unsecured Business Loan - All You Need To Know |
Collateral-Free Loans in India |
Unsecured Business Loan in India |
Types of Unsecured Business Loan |
How to apply for Unsecured Business loan |
Eligibility Criteria for Unsecured Business Loan |
Document Required for Unecured Business loan |
Stay up-to-date with our
Newsletter
© Copyright 2024 by AmbitFinvestPrivacy Policy