The used car market is open to all segments of buyers of late. From families looking to buy their first car to entrepreneurs buying second-hand swanky luxury cars like AUDI and Mercedes, the used car market is versatile in India, pegging right next to the new car sales. The promising forecast of a CAGR of nearly 8% for the Indian used car financing market between FY 2022 and 2027 confirms the same.
Taking out a loan for buying a used car is a sensible idea. Buyers can stretch their budget and, in most cases, can opt for a higher variant than what they could afford for a new car. The budget-friendly monthly installments that used car loans offer to add to the ease of buying your dream vehicle.
Borrowers can take a used car loan from Muthoot Capital to get the best interest rates and payment terms on their car loan. Read on to know about things one needs to check before applying for a used car loan.
5 Things to Check Before Applying for a Used Car Loan
1: Used car loan Interest Rate
The rate of interest the lenders charge on used car loans is usually higher than the interest charged on new cars. This makes it necessary to check the used car loan interest rate before applying for it. The rate of interest depends on multiple factors like the credit history of the borrower, his income level, type of vehicle, etc. Lenders also charge a one-time processing fee on used car loans. Lenders like Muthoot Capital offer used car loans starting at 8.5% p.a. under different schemes.
2: The loan Amount
Financial institutions offer different Loan To Value (LTV) on used car loans. Usually, it ranges between 80-90% of the on-road price of the car, but with Muthoot Capital, borrowers can get up to 95% of the car’s value as the sanctioned loan amount. A higher loan amount means a lesser burden on the borrower’s pocket when taking the delivery.
3: Ease of Approval
Buyers can pick their dream vehicle from authorized second-hand car dealers. These dealers offer several authentic options to buyers, and the cars they endorse come with an assurance of quality, clean paperwork, and genuine pricing. Getting a loan on such second-hand cars is easier. The right lenders keep their customers first and offer quick loan approvals with minimum paperwork. Lenders like Muthoot Capital even offer used car loans to people with no income base.
4: Easy Documentation
- Before going ahead with the loan application process, the borrower can check and complete the list of documents needed for the car purchase and loan. These documents include:
- Get the RC or Registration Certificate of the car transferred in the name of the buyer. The RC holds information about the chassis number, place and date of registration, engine number, etc.
- A No Objection Certificate on the car and the re-registration of the car by the RTO.
- The Pollution Under Control Certificate.
- Valid Identity proof, Address proof, and Income proof of the loan applicant.
- Asset proof.
- Photo proof in form of the latest passport size photograph.
5: Low Down payment
The buyer has to pay a part of the value of the car at the time of making the purchase. The lender finances a major portion of the car’s value, but the borrower needs to make a down payment on the car. Since the down payment puts an instant strain on the buyer’s pocket, he can look for a lender requiring a low down payment. Take a used car loan from Muthoot Capital for a low down payment and flexible EMI options.
Why Opt for a Used Car Loan?
- Used car loans start from Rs. 50,000 and go up to Rs. 10 lakhs, adding to the buyer’s paying capacity and confidence while picking up a car.
- The application and documentation process of a used car loan is easy and can be completed online in a few easy steps.
- Keep savings intact for emergencies with the high LTV offered by lenders like Muthoot Capital.
- User car loans come with flexible tenures, and borrowers can decide on the repayment period ranging between 12 to 60 months.
- In the case of prepayment of the loan, the borrower has to pay only a nominal fee that does not magnify the loan’s cost.
Buy your car from an authentic seller, like a registered dealer or a known car owner. Make sure the car’s papers are up to date and there are no dues or challans. A loan application for such a second-hand car has a higher chance of approval. Used car loan financing is a no-sweat deal with trusted names like Muthoot Capital.
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