Getting a Loan to Buy a Second-Hand Car

by | Jul 21, 2020

You are planning to buy a used car. You know that you need to get car loan and insurance. You have come to the right place to get a car loan.

Buying a used car is a great way to get that new car smell without spending a lot of money. Used cars are generally in better shape than new cars, so you can get a good deal. However, this does not mean that you will not have to go through a lot of paperwork and potentially have to pay some serious money.

The fact is, if you want to get a new car, you can always get a loan against your used car. The fact is, in most cases, your bank will give you a bigger loan against your used car than you will be able to get new. This means you can get a car loan against your used car for a lower price than a new one. This means you can get the best quality car at the best price.

Owning your own car is a dream come true for many people. Meanwhile, budgetary constraints are usually the biggest obstacle between dream and reality. That doesn’t mean you can’t buy the car of your dreams; consider buying a used car. Thanks to the growth of the used car market, you can get several options for the same model and choose the one that best suits your needs and budget. Plus, a loan secured by a used car can help you make your dreams come true without putting your hand in your pocket.

Advantages of a used car loan

Buying a new car is expensive. If you opt for a used car instead, you can easily become the owner of a four-wheeler without straining your budget. Buying a used car is much more profitable than buying a new one. The depreciation of a used car and insurance prices are much lower than for a new car.

How can I get a loan secured by a used car?

Applying for a loan for a used car is a simple and stress-free process. You may have found the perfect car at a reliable used car dealer, or you may have discovered a good deal online or through friends and family; either way, getting a loan for a used car is easy and convenient. You can submit your application online or in person to the lender of your choice. However, you must meet the lender’s criteria before you can apply for a loan. Some common criteria are:

  • Age – To qualify for a used car title loan, you must be between the ages of 21 and 65. However, this range can vary from lender to lender.
  • Income – Used car loan is available for those who have one year or more experience and a monthly salary of Rs 20,000 or more. Self-employed persons with at least three years of work experience and a monthly income of about Rs 20,000 are eligible. Again, the income and term of the loan may vary from lender to lender.
  • Documents – You must submit relevant documents with the application, such as per below :
  • ID: Pan Card/ Aadhaar Card/ Voter ID Card/ Driving License/ Passport.
  • Address confirmation : Work permit issued by NREGA/ permanent driving licence/ valid passport/ voter card.
  • Income verification : Salary slips/ Form 16/ ITR/ Bank statements for the last 6 months.
  • Proof of age: Birth certificate/driving license/college diploma/university degree.

In addition, there are several costs associated with a loan for a used car. You have to pay fees such as processing fees, early repayment penalties, insurance fees and other costs when you take out a loan. Always compare these costs at different financial institutions before signing the loan documents.  Once the documents are submitted, the lender will check your references. After verification, the lender will transfer the loan to your car dealer and you will soon receive your car.

Characteristics of a loan secured by a used car

Minimum documents

It is very easy to get a loan for a used car as only a minimum number of documents are required. You can apply for this loan online or in person at your financial institution’s office.

Large appropriation

This type of loan provides for a large loan amount. A loan for a used car can be as high as 50 lakh. Although the amount of the loan depends on many factors, you can still obtain a substantial amount.

Flexibility

As a borrower, you can choose the term of the loan, the IME and the loan amount. You can also choose your payment method from several payment options depending on your preferences.

Low interest rate

Compared to an unsecured loan, the interest rates on a secured loan for a used car are lower.

Low credit rating

You don’t have to have a high credit score to get money to buy a used car. Buyers with low credit scores can get this loan because the car is pledged as collateral to the lender.

Supplement

While buying a new car can be considered a luxury, buying a used car is the most cost-effective solution. Given the initial investment, the long-term cost, and the availability of financing, titled loans for used cars are relatively inexpensive. You can now buy cars at lower prices thanks to the more secure financing options on the market. You just need to make sure that you buy your car from a reputable dealer and that it has a warranty.

Interesting articles on this topic: Useful tips for buying a used car with a bad credit rating. Aging cars can be a real headache for most people. It is not just the cost of the car that concerns them, but also the cost of maintaining it. So, how do you get a loan against used car? This is the most common question asked by people who want to buy used cars and finance them. The answer to this question can be found in the market, mainly the car sale market.. Read more about best way to finance a used car and let us know what you think.