Banks and financial institutions let you choose from a number of loan options available for you. Apart from being a convenient option to a new car, used cars are easier to purchase, convenient to maintain and available in a hassle free loan. If you are looking to purchase a car but do not wish to spend too much, you can choose a used car. Financial institutions offer used car loans in a hassle free manner. The entire process of application is transparent and has a quick approval.
Individuals above the age of 18 with a steady flow of income can apply for a loan. It requires minimum documentation like address proof, identity proof, income proof, photographs and the documentation of the car. The car documents include registration certificate and insurance papers, these documents are essential for the loan process. Used car loans are only available for a car which is less than eight years in age. Hence, when you look for the options, only choose cars which are eligible for the loan and which will cost you lower in terms of maintenance. Visit a couple of preowned car markets and choose the one which suits your requirements. Interest rates for used car loan vary according to the loan amount and the tenure. If your tenure is long, the interest rate will be higher. The loan is available on any car type you choose to purchase.
Based on the car you choose to purchase, you can apply for the loan. The loan amount will be based on the amount of down payment you make. Since financial institutions approve a loan of about 60% of the value of the car you wish to purchase, the balance will have to be your down payment. The hassle free loan procedure has a quick approval and disbursement which will make it easier for you to bring your ride home in no time. The loan also has a low interest rate and flexible repayment tenure. The monthly installments can be based on the income of the applicant and the ability to repay the same. Interest rates for used car loan range between 11% to 20%. The processing fees vary from institution to institution.
The interest rates on used car loans are higher since the risk is also high. It is advisable to compare the interest rates offered by different financial institutions across the market. Once you decide on the car you want to purchase, you should scout the market for a reliable financial institution and understand the terms and conditions of the loan. Based on the same, you can decide the amount you will pay as a down payment and the balance can be applied for a loan. Most financial institutions do not require a guarantor for a loan, but if the income does not meet the eligibility criteria, you might be asked to involve your partner or parent as a co applicant to the loan.