A second-hand car loan is an ideal option to finance the purchase of pre-owned cars. However, this financial product has certain limitations while extending benefits, such as borrowers can use the fund obtained for buying second-hand cars only. Interestingly, this limitation does not exist when individuals get their second-hand car purchases financed through a personal loan. Read on to know the benefits of availing a second hand car loan, i.e., a personal loan for a used car.
Advantages of getting pre-owned car loans
Below are discussed the benefits of availing used car loans:
- Faster approval
When individuals apply for a second hand car loan, they can get approval in 5 minutes once they fulfil the eligibility criteria. The assurance of faster approval allows individuals to purchase a pre-owned car easily.
Since individuals are availing a personal loan, they can use the fund for other purposes as well with the saved up money from the pre-owned car purchase.
- Convenient repayment option
Choosing the best personal loan (in terms of features and rates for purchasing pre-owned cars) benefits borrowers in many ways. One of the prime advantages is the repayment option. Individuals who have availed personal loans for second-hand cars can choose to repay over a period of five years.
This longer repayment period allows individuals to repay per their suitability without burdening their pockets. Thus, individuals can plan their monthly budget and repay accordingly. To handle repayment efficiently, borrowers must know how to calculate personal loan EMIs.
- Flexible EMI option
Loan applicants can get the chance to borrow flexibly and pay the interest-only EMI if they choose a Flexi-personal loan. By availing a Flexi-personal loan, borrowers can withdraw funds per their requirements from their approved loan limit. In addition, borrowers can save a substantial amount as they pay interest as EMI in the first part of the tenor and the principal amount later.
This allows second-hand car purchasers to cover the post-purchase expenses, such as servicing or maintenance costs, revamping the car and many other things.
- Quick disbursal
When individuals purchase a second-hand car with a personal loan, they can get the loan amount transferred to their account within 24 hours. The assurance of quick disbursal enables borrowers to contact pre-owned car dealers quickly and purchase the selected car model and get one step closer to driving their own vehicle.
As stated earlier, borrowers availing second-hand cars through personal financing can use it for other purposes meaning they can cover personal expenses too. Therefore, if some medical urgency comes up, they can easily manage it as well.
Apart from knowing the benefits of availing a personal loan for a second-hand car, one must know the application process, eligibility and documents requirement.
Application process for a second-hand car loan
To apply for a personal loan, individuals have to follow the steps mentioned below:
Step 1 – Visit the official website of a lending institution of preference.
Step 2 – Click on apply online and navigate to the application form.
Step 3 – Provide a phone number and verify the profile with OTP.
Step 4 – Enter personal and employment details in the respective fields.
Step 5 – Submit documents and the application form.
A representative of the financial institution will contact the borrower and guide them on the next step.
Please note that individuals can take personal financing from thepersonal loan app or website of their preferred lending institution.
Eligibility of availing a second-hand car loan
To avail a personal loan for purchasing a pre-owned car, individuals have to fulfil the eligibility criteria mentioned below:
- Applicants must be a resident of India,
- Their age must range from 21 to 67 years,
- They must be a salaried individual and employed at a private or public company or MNC,
- They must have a credit score of 750 or above.
There are renowned financial institutions that offer personal loans toeligible applicants at a competitive interest rate.
In addition, financial institutions also provide pre-approved offers to simplify the loan availing experience. These offers are also applicable for other financial products, including personal loans, credit cards, business loans, etc. Individuals can check their pre-approved offers by entering names and contact details.
Documents requirement for taking a second-hand car loan
Following is a list of documents that individuals must submit while taking a personal loan for financing a used car purchase:
- KYC documents such as PAN, Aadhaar, Voter ID or passport, and driving license.
- Employee ID card
- Bank account details.
- Latest salary slips.
The second-hand car market is popular in India and experienced exceptional growth over the last two years. Increased demand and price hikes for new cars accelerated this growth even more. In such circumstances, opting for a second-hand car loanin the form of a personal loan can prove to be beneficial for borrowers willing to purchase a pre-owned car.