With a lot of used car financing options available today, we know it can be confusing for you to pick the best one. So, here’s our list of popular used Car Loans.
Are you planning to purchase a used car? If you are, then how are you planning to finance your purchase?
Regardless of whether you’re buying a pre-owned car because you have budget constraints, or you want to hone your driving skills before investing in a new car, there’s probably a good chance you’re looking to opt for a loan to finance your car purchase. Although there are quite a lot of financing options available, most people either opt for a Personal Loan or a used Car Loan.
So, which one should you opt for? A Personal Loan or a used Car Loan? Let’s discuss this.
At first glance, a Personal Loan may seem like the better option to finance your second-hand car. However, a used Car Loan has its own advantages, especially when it comes to guaranteed loan approvals, lower interest rates and sanctioning of the loan even if your Credit Score is at the lower end of the scale.
Of course, you can get a higher loan amount if you opt for a Personal Loan. This is because the loan amount for a used Car Loan is decided on the basis of the car’s age, model and condition. Used car financers usually provide only 70% to 90% of the car value. However, nowadays, some players have started to provide 100% financing.
Both used Car Loans and Personal Loans have their own set of advantages and disadvantages. However, the former is a better choice if you are looking to finance a second-hand car.
Now, assuming that you’re going ahead with a used Car Loan, let us tell you that choosing the right used Car Loan is as important as picking the right second-hand car. Also, with a large number of used Car Loan schemes available, it becomes even more difficult to choose the right one (we get it!). Therefore, we have picked five popular used Car Loans to help you make the best choice. Take your pick!
Additional Reading: Your Handy Guide To Used Car Loans!
Capital First, a non-banking financial institution or NBFC, offers used Car Loans to salaried and self-employed individuals (with regular income) who are above 21 years of age and below 65 years of age. The minimum monthly income required to qualify for the loan is Rs. 20,000.
Depending on your profile, the interest rate can be anywhere between 12.50% and 14.50%. The processing fee is 2% of the loan amount and the tenure can go up to seven years. No guarantor is required to avail this loan.
There is no pre-payment option for this loan. Pre-closure is allowed but only after six months. 4% of the principal outstanding amount plus taxes will be cut as pre-closure fees.
TVS Credit Used Car Loan is a great choice for customers who are looking for minimal documentation, fast approval and disbursal of their loan.
This financial institution offers used Car Loans to those earning a monthly income of Rs. 15,000 and above. Both salaried and self-employed individuals who are above 21 years of age are eligible to apply for this loan. The interest rate starts from 13.10% and the maximum tenure of the loan is five years. A processing fee of Rs. 999 plus taxes is applicable.
Oriental Bank of Commerce’s Used Car Loan is a good option to finance any second-hand four wheeler that will be used as a private vehicle. Salaried individuals, self-employed individuals and professionals who are 21 years old and above can avail this loan.
The income of the individual will determine the quantum of loan they are eligible for. The minimum monthly income required to be eligible for this loan is Rs. 40,000. However, you can make either your spouse or a close relative a co-borrower if your income does not meet the minimum requirement, or if you want to increase the loan amount.
The repayment tenure for this second-hand Car Loan is 5 years. The rate of interest applicable is 11.40% floating.
HDFC Bank is one of the leading lenders of used vehicle loans at competitive rates within the country. It is available for almost all used car models available in the market.
This used Car Loan can be availed by salaried who are above 21 years of age and below 60 years of age; and self-employed individuals who are 25 and above, but below 65 years of age. The minimum income requirement is Rs. 2,50,000 on a yearly basis. In case an individual fails to meet the minimum income required, he/she can apply for a joint loan with a family member and club both incomes to meet the minimum requirement.
HDFC allows customers to borrow up to 100% of the car value as loan and offers a repayment tenure of up to 7 years. If the borrower doesn’t have income proof, he or she can borrow up to 80% or 85% of the car value. The loan amount in this case depends on the chosen repayment tenure.
Additional Reading: Features Of Used Car Loans!
One of the oldest banks in the country, Dena Bank offers a hassle-free used Car Loan scheme at a competitive interest rate for those looking to finance their second-hand car purchase.
The applicant should be a resident of India, more than 18 years of age and should be drawing at least Rs. 8 lakhs per annum. The interest rate applied is 11.50% floating. Borrowers are offered a repayment tenure of 36 months. Dena Bank does not charge any prepayment fees or pre-closure fees.
Bonus Read: What To Do After Buying A Used Car
There are ample financing options available for used cars. Compare between different options from different banking institutions before you finalise on your second-hand Car Loan.