Many people cannot afford to buy a new car, so in turn, they buy a luxury used car. This trend has been popular due to the numerous benefits and features of a used car loan.
All the major banks and NBFCs provide various offers on used car loans, that have been specifically designed to suit the purpose. The used cars come at a reduced price as compared to a new one of the same model.
Following are the Features of Used Car Loan
- The loan amount granted is typically about 60% of the on-road price of the car, which may be extended to 85% in certain special cases.
- The maximum age of the car at the time of buying should not be more than 3 years (5 years in special cases).
- The normal tenure for repayment ranges from 3 to 5 years and not extendable beyond that.
- The actual EMIs may be lower than that for a new car loan in most cases.
- The interest rates applicable will be as per the terms and conditions stipulated by the particular financier.
- The Down Payment shall not be less than 15% in any case.
Things to keep in mind
Following are some points, that every used car customer need to keep in mind while taking such loan:
- The documentation requirement by private lenders are much more than the public sector lenders
- There is a lot of scope of negotiation in terms of interest rate, down payment amount, repayment tenure, and the processing fee.
- It is easier to waive off the prepayment penalty as compared to other car loans.
- The repayment tenure being shorter, the monthly instalments are higher which one needs to be prepared for.
You can experience a hassle-free and time-saving process by availing car loans through DialaBank.
Leading Providers of Car Loans in India: