Owning a car today is no longer an unachievable dream. Even if you do not have the money to buy a new one, you can still purchase a used car through a loan. Furthermore, the demand for used vehicles is increasing because of their affordability.
Most banks and non-banking financial companies (NBFCs) provide lending for used cars. Making the right choice from the different options may be confusing.
Here are four factors that will help you choose a reliable used car loans lender
1. Loan amount
It is possible that lenders will not approve the entire amount you apply for. When you purchase a used vehicle, you will need to make a down payment, which varies between different lenders. Therefore, opting for second-hand car finance from a lender that offers a higher loan amount will help you lower the down payment.
2. Interest rates
Loans for new vehicles are available at lower interest rates. In comparison, the interest for used car funding is higher. Nonetheless, several lenders offer affordable used car loan interest rate, which will reduce your payment over the tenure.
3. Repayment alternatives
The borrowed amount is repayable in Equated Monthly Installments (EMIs). Choosing a lender that provides flexible repayment alternatives is beneficial. This ensures you are able to repay the second-hand car loan without facing financial difficulties.
4. Cost of borrowing
Before you sign on the dotted line, it is important to read all the terms and conditions applicable to the loan. You must clearly understand additional costs, such as processing fees, pre-payment and partial payment charges, cancellation fees and late payment penalty on the loan for used cars. Knowing these additional fees will help you calculate the actual cost of borrowing.
Choosing a reliable and reputed lender to avail a loan will help you in the long term. A well-known lender will complete the entire process of approving your used car finance application in a short period of time. This ensures you drive your car at the earliest.
Click here to know more about used car loan benefits, required documentation and other details.