5 Best Reasons Why You Should Take Loan To Buy a Used Car

Everyone desires to own a car at some point in life. Unfortunately, not everyone can afford a brand new car due to financial constraints. Because of the high prices of cars and the current crisis caused by the COVID-19 pandemic, many people are opting for used cars. When everyone is staring at financial uncertainties due to economic slowdown, saving money for emergency purposes is an informed decision. 

However, that does not mean you should not pursue your dream of owning a car. You can avail of a loan for used cars and get one step closer to convenience. You can purchase a second-hand car on EMI with a lower interest rate and flexible payment tenure. It is the best way to get your dream car without putting an additional burden on your pocket or exhausting your savings. 

Benefits of loans for used cars 

Your dream of getting your car can be a reality by acquiring a loan for a used car. The best part is that the application procedure is hassle-free, the interest rate offer is low, and loans are approved pretty fast. 

Here are the five best reasons to opt for a second-hand car on EMI: 

1. Maximum loan amount

Lenders can offer up to 95% of the value of the used car as a loan. For instance, if the Insured Declared Value (IDV) of your preferred second-hand car is Rs. 1,00,000, then you can avail of up to Rs. 95,000 as a loan. The remaining Rs. 5,000 will have to be financed by your source.   

2. Low-interest rate and maximum loan tenure

One of the main reasons you should take a second-hand car on EMI is the lower interest rate. The interest rate offered against loans on the used car is pretty attractive and competitive. Also, you can choose a maximum loan tenure of up to five years. 

3. Minimum paperwork 

The documentation process to take a loan for a used car is easy and straightforward. The documents required for a used car loan are: 

  • Identity proof: Aadhaar Card, Passport, Voter ID card, PAN card, or driving license
  • Address proof: Any of the above mentioned documents
  • Income proof: ITR, Form 16, payslip, or bank statement. 
  • Asset proof: House/building tax receipt
  • Passport-size photo. 

4. A quick loan approval process

The approval and disbursal process for a second-hand car on EMI is quick. They are generally approved and disbursed within a day, given proper documents are submitted. However, you have to keep in mind that the processing time may be longer if the used car is purchased from an unauthorized dealer. 

5. Flexible eligibility criteria 

You must be wondering whether you are eligible to apply for a used car loan. Well, if you are someone who knows how to drive and desires to own a car, then chances are you are 21 or above, and you are also either a salaried or self-employed person. 

The eligibility criteria to apply for a second-hand car on EMI with most lenders are pretty flexible.

  • Applicants must be 18 years at the time of applying and 65 years at the end of the loan tenure. 
  • Either self-employed person or salaried.  
  • Must show a monthly income of Rs. 15,000 or a net profit of Rs. 1,50,000 per annum. 

Summary


You can now own your dream car by applying for a second-hand car on EMI and avail of low-interest rates and maximum repayment tenure.

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