All You Need to check and Verify about Used Car Loans

A car or any vehicle that is sold for the second or third time is known as a used car or vehicle. In India, many people have started preferring used cars over new ones because of budget constraints, commercial uses of used vehicles, easy financing options available for second-hand cars, etc. However, it becomes essential that you double-check personal loan eligibility criteria before applying for a used car loan because the features and benefits of these loans might vary from one financier to another. Some of the main benefits of availing of a pre-owned car loan are listed below:

Better options 

These days, even car dealers offer financing options to those who are interested in buying a second-hand car. For that, they either work in partnership with banks or private lending firms. Due to these additional benefits like car maintenance, transfer of RC book, quality assurance, warranty, etc. are also offered on used cars. 

Commercial use 

A used car is more beneficial for commercial use like pick and drops cab service, transportation, commutation services for schools or MNCs, etc. as it comes at a much lesser price than a new car. However, you must require additional charges for obtaining a transport license as compared to a private vehicle license. 

Also, some financiers might not provide financial assistance for commercial vehicles. Therefore, you must consider these factors and apply them smartly when you intend to seek finance for a used car. 

Increased commutation costs 

The increase in the rates of public transport facilities is also one of the main reasons why people are opting for a second-hand car. For such people, using a second-hand car is more a necessity than a luxury. 

If some of your colleagues are facing the same issue, you all can contribute and buy an old car or you all can co-apply for a used car loan to avoid the burden of the loan on a single person. 

The things that you need to cross-check before applying for a pre-owned car loan are described below:

Eligibility criteria 

Getting a clear idea about the eligibility criteria that a bank utilizes while approving a second-hand car loan is important as these rules will gauge whether your loan application will be sanctioned or not. 

For instance, if the car you are interested in purchasing is not older than 10 years then the chances of loan approval will be increased. However, you must also verify whether it had more than three owners in the past because most lenders will reject the loan if the car has been sold more than 3 times. 

Poor credit score 

If your CIBIL score is below the expected credit score, your loan application might get rejected. Your monthly income will also decide whether or not your loan will be sanctioned especially if you have applied for a higher loan amount. 

To avoid these complications, you can directly get an online personal loan and use it for purchasing a used car. You need to analyze the personal loan interest rates as a minute difference can cost you lakhs while repaying the loan. For getting a low interest personal loan, you need to have a good monthly income and your credit score should also be good enough. You may check the pre-approved offers that are applicable for your profile for getting an idea about the loan interest rates that you are eligible for. 

Many banks and finance companies provide pre-approved loan offers to individuals who are looking for instant financing options. Bajaj Finserv is a leading finance firm that is offering attractive pre-approved personal loans, medical loans, credit card offers, etc. Some details like phone number and name should be submitted on their website for knowing whether you are eligible for these pre-approved offers or not.