Used car purchase has picked up pace lately, with more and more people opting for this funding option due to its convenience and affordability. Many of these used vehicles are available in good condition with a long remaining shelf life and sometimes, low to no damages or depreciation. The most exciting part about having a used car is that buyers get the functionalities of almost new vehicles at a much lower price, which makes the second hand car market attractive.
To facilitate such purchase for individuals, the financial market has introduced different types of used car finance to choose from. These are traditional as well as innovative loan arrangements that allow individuals to gain access to the vehicles easily without needing to bear the burden of the entire cost all at once. Availing a used car loan has become significantly convenient today too. Below are given some critical ways in which a used car loan can assist with second hand car purchase, ownership, and beyond.
Restriction-free Financing for Any Used Car
If you are an aspiring used car buyer, chances are you can avail funding without much ado for any of your desired vehicle purchase based on its availability with your seller. It is because lending institutions provide used car finance for second hand cars of all makes and models. The only catch here is that the newer the vehicle the better.
Also, as financing is not available for cars that are older than 3 years with many lenders, you must enquire about the age of your vehicle before finalising.
High Loan Value
Budget should also not be a restrain when planning to purchase a second hand car loan as eligible candidates can easily raise funding of up to Rs.50 Lakh as used car loans. Thus, you can easily choose a high-end vehicle model for purchase irrespective of its resale value and differ. Its payment to an extended duration through EMI payments every month until the loan tenure completes.
Used car finance makes it significantly convenient for you to purchase. The used vehicle of your choice without you having to strain your budget. The EMIs payable are affordable too, so you can accommodate them easily in your fixed monthly expenses.
Multiple Financing Avenues
Finding a lending institution is convenient too when seeking a second hand car loan for vehicle purchase. From conventional lenders to new-age financing avenues like NBFCs, finding the right lender for your loan. Requirements is now just a few internet searches away. Once you arrive at the various funding institutions for the advance, you can compare them based on the available features that they extend. You can also compare other facilities like repayment options. Balance transfer facility, 100% car financing with zero down payment, etc. To find the right lender of your liking.
Competitive and Affordable Rates of Interest
Given the increasing number of lending institutions in the market, availing affordable interest rates on your used car loan is easy too. With a greater number of lenders, each financial institution attempts to gain new customers through attractive features and facilities. The most prominent among them being the rate of interest levied on these loans. Which makes the standard rates offered competitive, leaving the prospective borrowers to benefit.
Another reason that makes these rates affordable is the nature of used car loans. These are secured advances availed against used car hypothecation as security. As is commonly known, the presence of collateral security reduces. The overall risk involved with lending advance for financial institutions. It thus allows the lender to offer affordable rates on the loan.
High Loan to Value Ratio
The concept of LTV or Loan to Value Ratio is applicable to all collateral-based loans. Wherein the maximum cap a lender puts on the total loan availability is determined by LTV. It refers to the maximum loan availability as a percentage of the resale. Or current valuation of the asset to be collateralised. In the case of used car loans, the LTV is derived based on the resale value of such car and is usually high at up to 80%.
Thus, if the vehicle you are planning to purchase has a resale value of Rs.4 Lakh, you can avail. A high financing of up to Rs.3.2 Lakh for such vehicle purchase. The remaining amount needs to be met with a down payment to be made by the buyer himself/herself. A high LTV thus allows you to maximise funding for vehicle purchase.
Convenient Tenure Flexibility
Used car loans are available with convenient tenure options as well, with maximum tenure for these advances easily going up to 5 years. A long tenure thus allows you to reduce the monthly repayment liabilities to be met through easy EMIs payable. You can use a used car loan EMI calculator to assess your EMI affordability. And choose loan tenure for affordable repayment accordingly.
Used car finance requires individuals to meet simple eligibility and document requirements. Based on their age, income, city of residence, etc. The quick approval and disbursal of these loans makes them readily available for meeting. Your instant payment needs to the seller as well for hassle-free vehicle ownership.