Used Car Loan

Used Car Loan

A good second-hand car can be bought with the help of a used car loan. Used car loans are provided at attractive interest rates and come with a repayment tenure of up to 7 years. Certain lenders provide loans of up to 100% of the car’s value. Most banks and NBFCs provide used car loans. Self-employed individuals and salaried employees can avail a used car loan.

Used Car Loans – Features and Benefits

The main benefits and features of a used car loan are mentioned below:

• Long repayment tenure.
• Up to 100% financing is provided by certain banks and NBFCs.
• The process to apply for the loan is simple and can be completed online.
• The insurance costs and depreciation rates are lower when compared to a new car.
• Minimum paperwork needs to be submitted.
• Certain banks and NBFCs offer flexible repayment terms.

Important Things to do When Buying a Used Car

Some of the important things that you must do when you buy a used car are mentioned below:

• Check the car:Ensure that the car is checked thoroughly. You can take the help of a mechanic to check the car. If there are any issues with the car you can negotiate the price. Drive the car where the traffic is less, to check for any vibrations.
• Check the papers thoroughly:It is vital that the insurance papers and the registration certificate are checked thoroughly. Check if the engine number and chassis number on the car match the ones mentioned on the copies. It is also important to check if the car has had any accidents.
• Vehicle history: It is vital that the vehicle history is checked before buying it. Various details of the car can be found online. Checking the vehicle history helps to see if the car has had any accidents and if there have been any service issues.
• Transfer the Registration Certificate:Once the car has been purchased, ensure the Registration Certificate (RC) is transferred to your name. If the car is registered in another state, a NOC is required. If the car has been purchased on a loan by the previous owner, a NOC is required as well.
• Transfer the Insurance: The car insurance policy must be transferred to your name immediately. The insurance policy is void in case it is in the name of the previous owner even if the RC is in your name.
• Service the car:It is vital that the car is serviced before you start using it. In case of any rusts, it must be fixed. Change the fluids and clean up the car before it is used for the first time.

Frequently Asked Questions on Used Car Loans

Should I make a down payment for a used car loan?

Certain lenders require a down payment to be made when you avail a used car loan.

Do I have to provide security or collateral when I avail a used car loan?

No, security or collateral need not be provided when you avail a used car loan. The car acts as security.

Can I avail a used car loan if I have a low credit score?

In case of a low credit score, the application form will be rejected, or the interest rates will be high.

Can I avail a used car loan with a co-applicant?

Yes, you can avail a used car loan with a co-applicant.

Will there be any foreclosure charges?

Yes, many lenders charge a penalty in case of foreclosure.