Most of us dream of owning a car. But sometimes it is not possible to buy a brand new car. In such cases, we opt to get a pre owned car. With the help of pre owned car loan, you can buy the car you want.
Many times people make the mistake of and get a personal loan to buy the car they want. But when it comes to buying a secondhand car, people can easily opt for pre owned car loans. With the help of this quick loan, they can purchase the car with ease without having a financial burden. But it is important to keep certain things in mind before you opt for this loan. In this article, we will discuss some of the things that one should keep in mind before they choose to get a pre owned car loan.
- Overall budget
Although many people get excited about buying a secondhand car at a lower price compared to a new car it is important to keep in mind the other costs associated with a new car and a pre owned car. People often have other loans that need to be repaid. For those who can’t make a substantial down payment, then your interest rate and EMI will be higher. For this reason, it is important to look at your overall budget and then choose a car within your budget.
- Loan amount
The surveyor who is appointed by the bank or financial institute will check the car’s condition and accordingly approve your loan amount. A person can get 70 to 80 per cent of the valuation amount as a loan to buy a pre owned car. In certain cases, people who also get a high LTV can pay most of it without spending a lot from their own pocket. Many banks also provide users with an overdraft loan facility.
- Tenure
NBFCs or financial institutes often give the user a tenure of 5 years to pay back the loan amount. The lender will first see and appraise the car based on the condition and age and then decide on the tenure before approval. In case you choose a car that requires a lot of maintenance, then the approved loan amount and the tenure will be much less. Make sure you do not buy a car that is older than five years. These cars require a lot of maintenance, and the lender becomes cautious about it and often does not approve a car loan.
- Documents and eligibility requirements
It is important to see that you are eligible to get the pre owned car loans. Also, having all the required documents is important to get a car loan easily. The eligibility criteria for that is the person has to be a resident of India, should be over 18 years of age, salaried for at least two years and a minimum of 6 months in the current job, and business owner should be in this line for at least two years. When it comes to documents, people need to submit their identity proof, address proof, valid income proof, and passport size photos.
These are a few things that people should keep in mind when applying for a pre owned car loan. Apart from that, people should also have a vehicle inspection done to see whether the car is in proper shape. Also, it is important to look through the vehicle’s paperwork. Make sure to see that the vehicle you plan on purchasing have all the required documents so that you can get the loan sanctioned easily.
