As exciting car purchase can be through loan financing, it comes with a responsibility to assess all aspects related to the vehicle as well as the advance for smart borrowing. It is no different for a second hand cars loan as well, which allows you to easily meet the financing needs of used car purchase. These loans are high-value advances needing an individual to meet simple eligibility requirements to access. They secured funding arrangement also means that the interest rate remain competitive, making the advances affordable.
Also, irrespective of whether you are availing a second hand car loan in Delhi, Mumbai, Kolkata or any other city, availing the advance at favourable terms is possible. You must, however, know a few important things about the loan before applying for one. Which should help you make an informed borrowing decision. Let’s take a look at some of them.
The Car to be Purchased
While all car makes and models are eligible for purchase through a used car loan. It is not the only requirement that you need to focus on. Many lenders require the car to be not more than 3 years old for them to be able to finance it. Some lending institutions also limit the number of previous owners the car had to ensure. That the vehicle has not undergone depreciation beyond funding possibilities.
When selecting the car model of your liking, you must thus ensure to check. If the car is older than 3 years or not and how many previous owners did it pass through. Accordingly, it is also wise to arrange necessary documents that prove such ownership.
Available Lending Institutions
Your choice of lending institution bears a critical weightage in determining how favourably a used car loan works for you. You must thus first undergo detailed research to identify the available financial institutions that provide funding for used car purchase.
When doing so, you can take care of essential features offered by the lenders as well. And make a simultaneous comparison to decide on the best lender. Some of the important features to look for include the maximum loan amount available. Possibility of tenure extension, rates of interest applied, repayment options, balance transfer facility, and the likes.
The valuation of a used car has a significant contribution to the total loan availability. Based on various critical factors that are considered during such valuation. This sum-up is undertaken to identify the overall vehicle usage and what cost it should be transacted. At for it to hold the right value as per previous utilities.
When availing a second hand cars loan, keeping such valuation factors in mind thus becomes important. Important factors that should contribute to such valuation commonly. Include type of vehicle like commercial or personal, driving expertise of the user. Total kilometres the car has driven, previous modifications to the vehicle, location it was used previously, and the likes.
Loan Amount Availability
Total availability of the used car loan amount depends primarily on two factors. Which are the maximum cap on the amount and the Loan to Value (LTV) ratio determined by the lender. While maximum LTV of these loans can easily go up to 80% of the vehicle’s resale value. Reputed lenders provide financing of up to Rs.50 Lakh easily as used car loans. So, even if cost of the car is Rs.10 Lakh, an LTV of 80% would allow you. To avail financing of not more than Rs.8 Lakh even though the total loan availability is Rs.50 Lakh.
Further, your affordability of the advance ultimately determines how much advance you can avail as a second hand cars loan. You must check if the EMI for the selected loan amount remain under affordable limits or not for easy repayment of the advance.
Flexibility of Repayment Tenure
Check if the loan tenure is flexible enough for you to easily make repayment of the entire loan liability or not. Accordingly, select a tenure that best suits your financial standing. You can avail a repayment tenure of up to 5 years easily with some of the best lending institutions in the market. Before finalising the loan offer, check if you meet all the eligibility. Requirements laid down by the financial institution or not. Meeting these criteria is essential if you seek quick financing of a second hand cars loan. Also, keep all necessary documents handy and submit readily when applying for a streamlined application processing.