What are the Features of Used Car Loan?
The popularity of used cars has increased over the past few years. The number of used cars being bought every year has exceeded as compared to new cars. The people, who cannot afford to buy a new car prefer to buy a used car.
Also, 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, that 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 demanded by private lenders is much lesser as compared to the public sector lenders.
• There is a lot of scope of bargaining in term 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 installments are higher which one needs to be prepared for.
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