Amid the concerns of safety against the pandemic, more and more Indians can be seen investing in private modes of transportation, including used cars. In addition, the economic slowdown caused by the whole COVID situation has imposed various financial restrictions on people, which is undoubtedly a major reason for the sudden surge in the demand for used cars. Purchasing a used car allows people to enjoy the maximum amount of convenience during their everyday commute while acting as a budget-friendly option. In fact, today, the markets are flooded with many lending institutions that have well-customised financing solutions to make it absolutely convenient for the consumers to pay for the cost of any basic to premium pre-owned car.
However, you must keep this mind that the interest rate plays a major role in deciding the amount of EMIs. And hence, you must thoroughly search the markets and compare various lenders to pick the one with the best used car finance rates and favourable terms and conditions. Also, it is important for you to note that the interest rate offered to you gets majorly influenced by the factors such as the model you wish to purchase, the lender selected by you, the tenure period you choose and most importantly, your creditworthiness.
Do you meet the eligibility criteria to get a used car financed?
- The minimum age of the applicant while applying for the loan should be more than 18 years and maximum should be 65 years.
- Regardless of whether you are salaried or a self-employed individual, you must possess a stable and regular source of income, as this will help convince the lender about your ability to effortlessly make the timely repayments.
- You credit score must be positive as a credit score of 650 or above can help you avail a low interest rate, and is also an indicator of your excellent repayment capacity.
How to get a low used car finance rate?
- Choose a newer used-car model – Before offering you the loan, lenders consider the age and the model of the car to determine the used car finance rates. The interest rates are usually lower on newer models as they are in a better condition, and hence, will help the lender to recover the cost, in case, you fail to make the repayments. So, to avail a low interest rate, make sure your model isn’t that old.
- Make a high down payment – Another way of getting a low interest rate is by making a high down payment as a high down payment indicates that you are financially stable and will not make a fault in the payment cycle. In addition, another advantage of making a significant amount of down payment is that your principal amount and your EMI get reduced.
- Select a suitable tenure period – The lenders usually provide a low interest rate when you select a longer tenure and high rate when you choose a shorter tenure. However, you must keep in mind that with a shorter tenure, you may pay a high interest rate, but you will quickly get rid of the loan liability.
Few advantages of choosing a used car finance facility
- Since, the cost of a used car is lower than that of a new one, you do not face any financial burden, and are smoothly able to pay for the monthly instalments.
- These loans demand a basic eligibility criterion and are easily approved. In addition, a lot of lenders have actually moved the whole application to disbursal process online to deliver an immense amount of ease to the borrowers.
- The minimal documentation process allows you to seamlessly seek approval for the loan, and also, as there is no collateral involved, the funds are quickly disbursed in your account.
Easy-to-follow steps to apply for a used car loan online
- Visit the websites of several lenders to compare the loan options, terms of agreement, and additional benefits offered by each one of them.
- Once you select a reliable lender, use an EMI calculator and enter the loan amount, tenure, and interest rate to find out the monthly amount that you will be asked to pay. You can also try different figures to select that EMI amount, which can serve you the best.
- The next step is to fill the application form and submit it, and then wait for the approval to come. Once you get a green flag, the funds will be transferred into your account within a day or two.
Conclusion
If you are planning to purchase a pre-owned car through a used-car finance facility, then you are definitely making a wise choice. You just have to meet the eligibility criteria and look for a lender who can offer you low used car finance rates as the rate at which the loan is offered to you adds to the overall cost of borrowing. Moreover, if you wish to apply online, then you can follow the simple steps mentioned above.
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