The pre-owned car market in India has been seeing an upward growth for the last few years. The number of used cars sold has always exceeded the number of new cars being sold. But sadly, only a small percentage of these cars was financed with the help of a loan. The reason could have been the low awareness about the availability of used Car Loans.
However, this is slowly changing, especially with more and more first-time car buyers opting to get a second-hand car rather than a new one. Most of these buyers either belong to the salaried lot or are upgrading from a two-wheeler. Hence, they give utmost importance to financing.
Additional Reading: Your Handy Guide To Used Car Loans!
Are you planning to get yourself a pre-used car and are looking for financing? Maybe you should try the SBI Used Car Loan which is now called ‘Certified Pre-owned Car Loan’. Let’s tell you why this SBI scheme makes the cut:
What you’ll love
Long repayment tenure: Compared to other financial institutions, SBI offers a great deal of flexibility when it comes to repayments. You can pay back your used Car Loan in 5 years.
No advance EMI scheme: Advance EMI scheme is a common feature put across by most banks that offer Car Loans. In this scheme, banks usually ask loan borrowers to pay one EMI in advance. However, with an SBI used Car Loan, you won’t have to pay advance EMI.
Interest rates are relatively low: The lower the interest rate, the better it is! As of now, SBI levies 4.65% above the 1 year Marginal Cost of funds Lending Rate (MCLR).
EMI advantages: SBI provides a great deal of flexibility and convenience to its used Car Loan borrowers. For starters, the EMIs are generally lower as compared to other industry players. In addition to this, you can make your EMI payments anytime during the month too. Basically, SBI offers a hassle-free, stress-free loan repayment experience.
LTV ratio: The loan-to-value (LTV) ratio is the comparison between your loan value and the car’s value. With SBI, you get an LTV of 80% on the on-road price of the used vehicle you’re buying. This also includes the registration of the vehicle, insurance, and cost of accessories up to Rs. 25,000.
The interest is calculated on Daily Rest basis: Rest assured, you won’t be shelling out a lot on interest charges. With the Daily Reducing Balance, you reap the benefit of a lower principal sooner than a Monthly Reducing Balance or a Yearly Reducing Balance.
Pre-payment fee is low: Want to pay off your loan before the tenure but worried about how much of a penalty you’ll have to pay? Worry no more! SBI charges a low penalty of just 2% if you wish to pre-pay your loan amount.
Processing fee is low: Processing fees are charged as a percentage of the total loan amount to compensate for the cost of the credit appraisal. It is usually 0.5% to 1% of the loan amount. SBI does not charge more than 1% of the loan amount as processing fee.
SBI Life Cover: All applicants are eligible for an SBI life cover along with the loan. As an applicant, you can choose whether to take it or not.
Are you eligible?
Eligibility requirements are pretty simple and straightforward! You’re eligible for an SBI used Car Loan if:
- You’re between 21 to 65 years of age
- You’re a permanent employee belonging to the Central/State Government, Public Sector Units, private companies or any reputed establishment
- A self-employed individual or a professional who is a tax payer
- An agriculturist or a personal involved in similar activities
What about income?
- For salaried individuals, the minimum income requirement is Rs. 2,00,000 per annum.
- For self-employed individuals, professionals and agriculturists, the minimum requirement is Rs. 4,00,000 per annum.
The income of a co-applicant can be clubbed to meet the minimum income requirement.
SBI is a popular finance provider for pre-owned cars and its Car Loan scheme to purchase used cars is one of the best in the country. They offer finance for purchase of used passenger cars, multi-utility vehicles (MUVs) and sports utility vehicles (SUVs) that are not older than five years.
Additional Reading: What To Do After Buying A Used Car
If you’d like to check out pre-owned Car Loans from providers other than SBI, just head on over to the BankBzaar site and take a look around. You just might find something you like.