Choosing a pre-owned car requires a proper search process to make sure that it is in a well-maintained condition. However, once you are able to select the right car, it will undoubtedly serve you for several years, without constantly demanding maintenance. Today, there are numerous financial institutions and individual lenders that make it easier to purchase a second hand car by offering used car loans.These loans are customized exactly to meet your specific requirements and are offered at competitive interest rates.
The rate of interest at which a loan is offered makes a huge difference to the overall cost and hence, you must compare a bunch of lenders in order to select that lender who can offer a low second hand car loan interest rate. Also, you must maintain a positive credit score and repayment history as many of the lenders are ready to negotiate the interest rates if you have a CIBIL score of 650 or above. Furthermore, you must use an EMI calculator to check whether or not you will be able to pay the monthly instalment suggested by the lender.
What are the benefits of second hand car loans?
• These loans are accompanied with a quick approval and disbursal process.
• The borrowers get the flexibility to choose the period of tenure between 12 to 60 months and many of the lenders allow you to take a loan from Rs. 50,000 to Rs. 5 lakhs.
• The interest rates can get as low as 8-9%, depending on your creditworthiness, financial stability and debt-to-income ratio.
• The lenders may provide up to 90% of the car’s value as the loan amount.
What are the factors that may affect the used car loan interest rates?
1. Credit score – The lenders strictly consider your credit score to determine the second hand car loan interest rate. Your application may not get accepted or you may be offered a high interest rate if your credit score is low. Hence, you must maintain a positive credit score.
2. Age of the car – The age of the car is also taken into consideration before offering you the loan and the lenders usually ask for a high interest rate on the older cars and low interest rate on the newer ones. Additionally, make sure that the car you intend to buy is maximum 8 years old as otherwise your application may get rejected.
3. Repayment tenure – The lenders may offer a low interest rate in case you opt for a longer tenure and a high rate when you opt for a shorter tenure. However, you must keep in mind that when you select a longer tenure, you end up paying more interest.
Conclusion
To wrap up, purchasing a second hand car has become incredibly easy with a second hand car loan. The loan allows you to get any pre-owned car financed so that you can repay the entire cost of the car in the form equally divided instalments. All you have to do is keep the above-mentioned factors in mind in order to get a loan at a low second hand car loan interest rate as these factors are highly responsible for increasing/decreasing the interest rates.
