While owning a brand new set of wheels is a long-cherished dream of thousands of people across the country, not everyone can rustle up the finances needed to own the car of their dreams. Sure, with the incredible range of Car Loan options currently available in the market, purchasing a brand new car is easier than ever before.
However, not everyone can afford the high EMIs and interest rates that come with regular Car Loans. This is exactly why the used car market is constantly on the upswing. If you’re one of those people looking to purchase a used car at an affordable price by taking out a Used Car Loan, then you’ve come to the right place.
We’re going to tell you all about the various aspects of a Used Car Loan and how to apply for one. However, before we get started let’s give you an overview of Used Car Loans.
Nowadays, getting a loan for a pre-owned car is a lot easier than it used to be. The easy availability of loans for used cars along with a wide range of buying options have all helped the pre-owned car segment rise exponentially in the recent past.
Additional Reading: Features Of Used Car Loans
What Is The Difference Between A Used Car Loan And A New Car Loan?
The loans offered for pre-owned cars differ slightly from those offered for new cars. The basic difference between new Car Loans and Used Car Loans is that the age of the car and its model play a key role in determining the financial intricacies of the loan.
Interest rates offered on Used Car Loans are usually around 3-4% more than that for new Car Loans. The loan offered for the purchase of a second-hand car also ranges between 60% to 80% of the value of the vehicle.
Additional Reading: Difference Between Used And New Car Loans
Things To Consider Before Applying For A Used Car Loan
While there are a host of important things to consider before availing a Used Car Loan, the most important factor when determining the tenets of the loan is the age of the car and its model.
If the car model doesn’t exist anymore or has been phased out by the manufacturing company, then your chances of landing a loan substantially reduce. In general, the age of the vehicle, as well as the loan tenure, should not exceed seven years.
What this means is if the car is 3 years old for, example, then the maximum loan tenure that you could hope to get is 4 years. However, it is quite rare to get a Used Car Loan for a vehicle that is already four or five years old.
Once you have zeroed in on the car that you want and determined its make and model, the bank will send its valuation expert to calculate the present value of the car.
A margin of Rs. 25,000 for registration, insurance and accessories is kept while assessing the final estimate price of the used car.
After the bank’s valuator determines the price of the car, the bank determines the amount of loan to be sanctioned.
Additional Reading: Your Handy Guide To Used Car Loans
How to Apply For A Used Car Loan Through BankBazaar
You can easily apply for a Used Car Loan online through BankBazaar’s Used Car Loan portal, which offers customers a fantastic range of loan options that are tailor-made to meet all your requirements. You can zero in on a Used Car Loan of your choice by browsing through and comparing different loan parameters for pre-owned cars such as interest rates, documentation required, eligibility conditions, fees and charges and more.
Additional Reading: Checklist For Buying A Used Car
To apply for a Used Car Loan on BankBazaar, all you need to do is follow three simple steps:
- Head to BankBazaar’s homepage and choose the Used Car Loan option via the Loans drop down menu at the top of the screen.
- You can then compare the Used Car Loans that show up and choose one that fits your financial requirements. You can check the various parameters such as eligibility, amount of money you can borrow, rate of interest etc. Once you have decided, click on ‘Apply Now’ to apply for the loan you have chosen.
- After submitting your application online, BankBazaar will send you an instant e-approval form, which is then sent to the bank who you’ve chosen to take out a Used Car Loan with. A representative from the chosen bank will then contact you, and you can track your application via SMS or email notifications.
Additional Reading: What To Do After Buying A Used Car
Things To Keep In Mind When Applying For A Used Car Loan
- Applying through a bank is generally beneficial since they offer slightly lower interest rates than NBFCs.
- The final rate of interest that you get usually depends on how strong your credit history is and your relationship with the bank.
- Used Car Loans usually come with a processing fee of 0.5% of the total loan amount.
- The down payment for Used Car Loans is typically fixed at 20-40% of the assessed value of the car, depending on the car’s model and your financial situation.
- Compared to loans for new cars, it is generally easier to get a waiver on prepayment penalties on Used Car Loans, should you choose to close your loan in advance.
Additional Reading: Popular Used Car Loans In India
There you have it. Applying for a Used Car Loan is easier than ever, so it’s time to rest your feet and get your own set of wheels.