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5 Factors to Consider While Availing a Used Car Loan

A car has become a necessity rather than a luxury. When it comes to honing driving skills, many people prefer buying a second-hand car rather than a new one. Be it a new car or an old one, taking a car loan for buying a car is a good option. 

A car loan is nothing but a personal loan that you can use for purchasing a car. Car loans have become popular in the Indian market in recent times owing to technological growth. 

If you are planning to buy a used car, you can go for a second-hand car loan. Read on to know some tips that can help you in availing the best car loan for a second-hand car.

 

  • Check the age and model of the car

 

The age of a car plays a significant role in the financing decision. In the case of a second-hand car, the age of the car decides whether it is loan worthy or not. The model of the car is also important because loan providers are unlikely to offer used car finance for an outdated car model. 

 

  • Find out the value of the car

 

Once you have decided to buy a particular car, you should go for its valuation. The model of the car, condition of the car and the numbers of kilometres run determines the value of a used car. The amount of car loan that you can avail depends on the value of the car.

 

  • Check the interest rates

 

The rate of interest is the most important component of any loan. In case of a car loan, the interest rates not only vary from one lender to another but also for new and old cars. The interest rate on used car loans is higher than that for new cars. You can research online personal loan offers provided by various banks and financial institutions to get the best interest rate.

 

  • Ascertain EMI and other charges

 

There are many charges associated with a second-hand car loan. You should check the processing fees, foreclosure charges and part-payment charges before making a final decision. You should always go for an EMI that fits into your monthly financial budget.

 

  • Borrow as per your need

 

A car loan is an extension of a personal loan, and hence the eligibility criteria are simple. Yet, you should borrow as per your need. Availing a higher loan amount because you are eligible for it may not be the right decision always. You should check the finances available at your disposal before going for a loan. A car loan is nothing, but debt and over-borrowing will create a burden on you in the long run.

A used car loan is a hassle-free way to finance a second-hand car as it lets you manage your finances well along with buying a car. Now that you know the factors that you should consider while applying for a used car loan, you can go for a car loan that suits you the most. 

Bajaj Finserv brings to you pre-approved offers on its various financial products like personal loans, home loans and many more. It is to simplify the loan procedures to make it less time-consuming.

You can check your pre-approved loan offer by sharing some basic details like your name and mobile number.