Thursday, December 19, 2019

Which Financial Institution Is Best For A Used Car Loan?

Availing a personal loan to finance the purchase of a used car is one of the ideal options owing to the considerable amount it offers at an affordable interest rate. Several financial institutions and NBFCs provide such used car loans to help you finance your purchase.

That being said, selecting the best financial institution can be much of a challenge owing to the lucrative benefits they provide. Hence, before you select your lender, consider the below-mentioned factors to choose the one that will suit your need, such as –

Eligibility criteria

Having stringent eligibility criteria can lower the chances of approval. It is thus advisable to opt for financial companies which offer loans against relaxed eligibility criteria. The better you fulfil the eligibility criteria before you apply for second hand car finance, the more beneficial terms will you be able to avail. To be eligible to apply you are required to:

  • Be between 23 and 55 years of age.
  • Hold a considerable salary and employment under an MNC, public or private company.
  • Be a resident of India, residing in any of the cities where your lender would operate.

Besides, maintain the required CIBIL score for a personal loan for used cars, a minimum of 750 and above.

You can use a loan eligibility calculator to check if you qualify for such advances and then apply.

Documentation process

Used car loans necessitate substantial paperwork, more in comparison to other unsecured loans. While you apply, consider checking the documentation process of your lender. The list of the documents that you are required to submit include –

  • KYC documents: Like Aadhaar card, PAN card, voter ID, passport, driving license, etc.
  • Residential proof: Such as ration card, electricity bills, water bills, gas bills, telephone bills, etc.
  • Income proof: Like salary slips, income tax returns, account statements, etc.

Additionally, you are also required to submit your employee ID card along with a passport-sized photograph.

Application process

Consider choosing NBFCs that offer a convenient application process. To apply for a used car loan you are required to:

  • Visit your lender’s official website.
  • Share the required details (personal and financial) to fill an application form.
  • Depending on your financial portfolio, NBFCs offer you instant approval. As soon as your application gets approved a representative will get in touch with you and take you through the process.
  • Submit the above mentioned documents to proceed for verification.

After the verification is completed, your loan amount will be credited to your bank account within 24 hours.

Interest rate

Your EMIs includes two components, the principal and the interest components. Availing advances at an affordable interest rate helps you keep the cost of your loan low and also lets you avoid the burden on your pocket. Once you know the interest rates, you can use a loan EMI calculator to estimate your monthly repayments and manage your finances accordingly.

To use a personal loan calculator, you are required to alter your loan amount and loan tenor to have an estimation of your EMI amount and total cost of your loan.

Bajaj Finserv is one such NBFC that offers used car loans at an attractive interest rate and is a host of several other benefits such as instant approval, quick disbursal within 24 hours, substantial loan amount of up to Rs.25 lakh, flexible tenor of up to 60 months, online account access, etc.

You can also enjoy pre-approved offers if you are an existing customer. Pre-approved offers reduce the hassle of application and help save your time. These offers are available on several financial products such as home loans, personal loans, business loans, professional loans, etc. To check your pre-approved offer, you are required to share minimal details like your name and phone number.

Before you decide on the loan amount, consider analyzing your income stability to support your EMI payments and the price of your car. Avoid availing more than what you need as the repayments could be substantial on your budget.

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