Used Car Finance - How to Go About The Process

Owning a car is a great feeling but finding the right one that fits your budget can be a little difficult. Besides your house, your car is the most expensive consumer product that you purchase. Hence, it makes sense to buy a used car to travel conveniently. A used car will save you from unnecessary financial burden without compromising the factor of quality. Most importantly, you can opt for used car finance to buy the pre-owned cars while seamlessly dealing with budget constraints. Moreover, the insurance costs and depreciation rates of used cars are comparatively lower than that of a new car.

Things to keep in mind while availing the facility of finance for used cars

• Interest rates – The interest rates for used cars greatly differ from one financial institution to another lender. These usually start from 13% and can even go high, depending on the car you intend to buy. Hence, you must compare various lenders in order to select the most feasible and reliable option.

• Associated charges – Along with the interest rate, you should also take into account the amount of associated charges you have been asked to pay. Additionally, these also differ from one lender to another as some charge Rs. 12,000 as processing fees, whereas others can ask for a higher amount. Therefore, you must thoroughly research about such charges as they can increase the cost of your loan.

• The application process – Before settling down for any financial institution, you should also consider the total time required for the application process of used car finance. Usually, it takes a week to complete all the formalities, including the valuation of the car you want to buy. The smoothness of the process also depends heavily on your credit history, as if you have a positive report then your loan will be quickly approved otherwise you will have to face some trouble.

• Tenor – When availing a used car loan, you should definitely consider the point of repayment tenor. In case of used car loans, generally the tenor extends up to 60 months. A longer tenor implies lower monthly instalments, whereas a shorter tenor demands a higher instalment value every month. However, while opting for a short tenor, you end up paying less interest and get to quickly get rid of the loan.

Eligibility criteria to finance used cars

In order to apply for the financing facility, the applicant should be more than 18 years of age and must have at least two years of work experience with six months completed at the current job. The application process demands basic documentation work that includes identity proof, address proof, income proof and few passport-size photographs. The loan can be availed for any type of car and is usually restricted to 60% to 80% value of the car. In other words, the rest of the balance will be your down payments. Above all, the car should not be more than eight years old in order to fit the eligibility criteria.

Conclusion

These days a lot of consumers are applying for used car finance to buy a car without burning a hole in their pocket. To find a dependable lender, you need to search the markets to compare the different financer and the interest rate they offer, along with other terms and conditions. This way, you will be able to make an informed decision without facing any issue in the future.

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