For most Indians, owning a car is a big dream. It is a way to express your style and comfort. However, if you have a limited budget, you may have to put a new car purchase on hold. Not necessarily! Because you can get the same sense of comfort by buying a used car.
Besides, multiple loan options have made purchasing a second-hand car very convenient. Here are the things you must consider before getting a second-hand car loan.
Once you have finalised the model of the car you want to purchase based on your requirements, it is time to go for the car valuation. The car valuation is vital in the case of a used car purchase.
However, when evaluating the car, consider factors like the car title, the number of kilometres driven, used car history, the user profile (personal or commercial), places of usage, service history, etc. A clear understanding of these factors will help you arrive at a fair price for the car.
Rate of interest
Getting a fair interest rate on a used car loan is the next step. Generally, the interest rates on the used car are higher than that of new vehicles. The interest rate is calculated considering the factors like your vehicle type, customer profile, credit history, geography, market discounts, etc.
To get yourself the best deal, you can compare the interest rates offered by multiple lenders and choose the one that fits your budget.
The lender asks you to pay a certain amount of down payment once a loan amount is decided. So, you should be ready with your homework on how much down payment you can make. As a down payment, rates of interest, loan amount, etc., are inversely linked to each other; the more your down payment is, the less loan amount you will have to borrow, followed by fewer monthly EMIs you need to pay.
You can use a used car loan EMI calculator to get an estimate of your monthly EMIs and interest payable.
Understanding your loan repayment structure is a crucial factor before getting a used car loan. You may want to pay off your loan as soon as possible to reduce the interest payable. In that case, you should inquire about the prepayment fees and any penalties if you are unable to pay during the tenure period.
It’s prudent to choose an EMI plan you are comfortable paying.
Document verification is critical when you go through any loan application process. So, before you close the deal with the selected lender, you must keep the required documents in place. At Tata Capital, we require the following documents.
- Identity, income, and address proof
- Past three months’ salary slips
- Vehicle Registration certificate (RC)
- Telephone bill/mobile bill
- Signature copy with proof
Looking to get a second-hand car loan to purchase your dream car? Turn to Tata Capital for a hassle-free borrowing experience. We offer attractive used car loan interest rates, custom EMI plans, and more. Apply today!