How To Get Benefits from Second-Hand Car Loans? - Loan Trivia


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Wednesday 30 June 2021

How To Get Benefits from Second-Hand Car Loans?


Buying a second-hand or used car can be a smart decision as it is better to travel alone than commuting via public transport facilities these days. However, purchasing a second-hand car can also be a costly affair as many car owners do not negotiate much when it comes to the price. Therefore, it is better to apply for a pre owned car loan to buy a used car without any issues. 

Used car loans are offered at higher interest rates than loans offered for new vehicles. This is because the lenders are not able to investigate the history of a pre-owned vehicle perfectly. Also, the risks associated with a used car are a lot more as compared to a new car. However, there are still some benefits associated with a second-hand car loan some of which are explained below:

No need to spend your savings 

A second-hand car loan will ensure that you don’t spend a chunk of your savings in buying a used car. Instead, you can focus on investing more by saving the money that you spend on commuting through public transport facilities like buses, trains, and cabs.

Short tenor 

The tenor of used car loans is a lot shorter than a new car loan. This is because the lenders don't want to risk their capital by providing a long-term loan on used cars. 

You can use this to your advantage as you can clear the debt quickly and a debt that has been repaid on time will reflect well on your credit score. 

Approval for high-value loans 

Many lenders offer high-value loans even for used cars. Also, the approved loan amount can be up to 85% of the estimated price of the used car. Many lenders also offer support services for transferring the ownership of used cars from the previous owner to the new owner. Therefore, getting a used car loan might also help you to get the ownership of the car transferred in your name without any hassles. 

Eligibility calculator 

If your loan application gets rejected, it will reduce your credit score unnecessarily as every hard inquiry decreases your credit scores by a few points. To avoid this, some lenders offer an eligibility calculator on their websites. This calculator enables you to find the interest rate, EMI, loan tenor, and other features that you qualify for in advance. As a result, it allows you to analyze your fund requirements and loan features conveniently. 

Interest rates

The interest rates applicable to second-hand car loans are higher than new car loans. However, if your credit score is good and you have a good relationship with the lender, you might be able to get this loan at a competitive interest rate. 

Also, if you find the interest rate to be higher, you can apply for a low interest personal loan from a bank or NBFC. By opting for a personal loan, you can get a more flexible loan repayment tenor. Moreover, as personal loans are mostly collateral-free loans, you don’t run the risk of losing your car in case you fail to repay the loan on time. 

Some NBFCs are also providing pre-approved offers to their customers nowadays. For example, the pre-approved offers from Bajaj Finserv include personal loans, car loans, credit card offers, and much more. Also, you can now check your eligibility online by simply providing your name and contact details. Once you provide these details, the list of offers that you are eligible for will be displayed and you can pick the offer that suits your requirements accordingly.

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