Owning a car has become a necessity for families and individuals. But buying a used car has become a sensible option, especially for new drivers and those who are on a strict budget. Buying a second-hand car on finance can open doors to a wide range of options that suits your budget. Moreover, the second-hand car sector has become large and organized these days and banks are offering attractive used car loan interest rates. This enables buyers to buy the car more easily and confidently than ever before. There are some pointers to consider before buying a second hand car on finance, let’s look at them.
- History of the car – Before you decide on the lender of the used car, make sure you have gathered the right details of the current car owner. Also check the claim history, service records, and other details.
- The registration certificate of the car – when you buy second hand car finance, ensure you know the right owner of it. Check for its registration certification to check when it was purchased or if it’s stolen from someone else. Now, check the PUC and other essential documents along with the registration certificate.
- Check the insurance – Try to find the car’s insurance paper for validity before settling on a second-hand car. These help you to figure out if the car has been meeting with any accidents or if there were any insurance covered.
- Check the mileage:- It is essential to conduct a test drive to find its mileage. To determine the car’s age you can use a car mileage calculator online to find it.
- Manufacturing year:- A car’s depreciation is also determined by its year of manufacturing. Used cars aged on papers are considered aged no matter what the odometer readings are.
- The condition of the car:- Check for its outlook and also check whether the interiors are clean
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Used car loan interest rates
Secound hand used car loan interest rate varies from 14% to 20% from lender to lender. Used car loan interest rates are higher than new car loan which falls between 8% to 10%. As the tenure is a bit rigid and it can be for a maximum of 5 years to repay it.
- Eligibility for a second-hand car loan
- These loans are offered for salaried or self–employed persons
- Your income must be steady
- CIBIL score must be above 800
How to Apply?
As mentioned the loan tenure will be between 1 to 5 years and the lender might give you up to 85% of the total value of the vehicle. The tenure will never exceed more than ten years and when you ask a lender, they will assign you an expert to evaluate your car. The lender will then offer you r the value after assessing and the buyer will have to make a down payment.
Documents required
Carry the following documents if you are doing it offline;
- Age Proof (Driving License, etc)
- Income Proof (Payslips and bank statements)
- Address Proof (Utility bills, etc)
The lender will verify the details before beginning the process. Once the second hand car finance loan is approved, the amount will be disbursed to your account in a specific time period. You can also do this online and an agent might be there to guide you with the process.
Things to consider if you want to buy a second hand car
- Go for shorter tenure – Remember to choose the shortest repayment tenure depending on your ability to repay and budget. Though longer tenure might lower your EMIs, it will surely incur a higher interest rate as the payable charge might keep increasing over time. On the other hand, shorter tenure might result in huge EMIs but with a lower interest rate. So choose wisely and prefer to pay in small repayments.
- Compare the lenders – before choosing second-hand car finance, compare the lenders and look out for festive schemes and discounts. You can do this by researching online.
- Maintain good credit health- This is very essential, as the lender might check your eligibility by checking your CIBIL and credit history. If you have a bad repayment history, this might lead to more interest rates.
Conclusion
If you are willing to buy second hand car finance with competitive used car loan rates then this is the right guide for you! Don’t give it a second thought. You can either apply for these loans online or offline. Some banks offer you instant online approval with very less documentation. With just a few clicks away, you can now buy used cars! These banks also have flexible EMI plans and longer loan tenure which allows you to repay at your convenience.
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