Which Financial Institution Is Best For A Used Car Loan?

Availing a personal loan to finance the purchase of a used car is one of the ideal options owing to the considerable amount it offers at an affordable interest rate. Several financial institutions and NBFCs provide such used car loans to help you finance your purchase.

That being said, selecting the best financial institution can be much of a challenge owing to the lucrative benefits they provide. Hence, before you select your lender, consider the below-mentioned factors to choose the one that will suit your need, such as –

Eligibility criteria

Having stringent eligibility criteria can lower the chances of approval. It is thus advisable to opt for financial companies which offer loans against relaxed eligibility criteria. The better you fulfil the eligibility criteria before you apply for second hand car finance, the more beneficial terms will you be able to avail. To be eligible to apply you are required to:

• Be between 23 and 55 years of age.
• Hold a considerable salary and employment under an MNC, public or private company.
• Be a resident of India, residing in any of the cities where your lender would operate.

Besides, maintain the required CIBIL score for a personal loan for used cars, a minimum of 750 and above.




You can use a loan eligibility calculator to check if you qualify for such advances and then apply.

Documentation process

Used car loans necessitate substantial paperwork, more in comparison to other unsecured loans. While you apply, consider checking the documentation process of your lender. The list of the documents that you are required to submit include –

• KYC documents: Like Aadhaar card, PAN card, voter ID, passport, driving license, etc.
• Residential proof: Such as ration card, electricity bills, water bills, gas bills, telephone bills, etc.
• Income proof: Like salary slips, income tax returns, account statements, etc.

Additionally, you are also required to submit your employee ID card along with a passport-sized photograph.

Application process

Consider choosing NBFCs that offer a convenient application process. To apply for a used car loan you are required to:

• Visit your lender’s official website.
• Share the required details (personal and financial) to fill an application form.
• Depending on your financial portfolio, NBFCs offer you instant approval. As soon as your application gets approved a representative will get in touch with you and take you through the process.
• Submit the above mentioned documents to proceed for verification.

After the verification is completed, your loan amount will be credited to your bank account within 24 hours.

Interest rate

Your EMIs includes two components, the principal and the interest components. Availing advances at an affordable interest rate helps you keep the cost of your loan low and also lets you avoid the burden on your pocket. Once you know the interest rates, you can use a loan EMI calculator to estimate your monthly repayments and manage your finances accordingly.

To use a personal loan calculator, you are required to alter your loan amount and loan tenor to have an estimation of your EMI amount and total cost of your loan.

Bajaj Finserv is one such NBFC that offers used car loans at an attractive interest rate and is a host of several other benefits such as instant approval, quick disbursal within 24 hours, substantial loan amount of up to Rs.25 lakh, flexible tenor of up to 60 months, online account access, etc.

You can also enjoy pre-approved offers if you are an existing customer. Pre-approved offers reduce the hassle of application and help save your time. These offers are available on several financial products such as home loans, personal loans, business loans, professional loans, etc. To check your pre-approved offer, you are required to share minimal details like your name and phone number.

Before you decide on the loan amount, consider analyzing your income stability to support your EMI payments and the price of your car. Avoid availing more than what you need as the repayments could be substantial on your budget.

The Used Car Buyer's Checklist

In today’s financial climate everyone is after a good deal, but buying a used car can be a real minefield of potential hazards and problems, so by having your wits about you and by using this handy used car buyer’s checklist, you should be able to avoid buying a dud. Many of the typical problems people associate with used cars are easily dealt with. However, these hidden costs are often not taken into consideration when a motorists decides to buy, leaving them to overestimate the bargain they’ve received:

Tires

Not the most obvious thing to check, but tyres can actually be one of the most expensive parts to replace on any car. Making sure you buy a used car with good tyre depths left on all four wheels is essential – as having to replace four tyres will typically cost several hundred dollars. Couple that with the potential danger (and hence insurance costs) of driving a car which has bald tyres and it makes you realise why the rubber is so important!

Service history

The service history of any car is the only real way of making sure the car you’re buying has been looked after. Service intervals also show the car’s mileage, meaning you can check to see if it’s ever been clocked or if something is not quite right.

Remember, a service is essential to keep the car running smoothly. Don’t under-estimate the importance of a good service history.

Brakes

Chances are you’ll want to take the car out for a test-drive before you buy, but one of the things many people forget to check is the condition of the brakes. The best thing to do is try a few emergency stops to ensure that: 1. The ABS is in fully working order and, 2. that the brakes actually stop the car as they should. New brakes all-round can cost an absolute fortune, so it’s best to make sure you don’t get caught short.

VIN

The car’s Vehicle Identification Number (VIN) is a very simple but often forgotten about way of confirming your car hasn’t been messed around with. If the VIN doesn’t match up to the number on the logbook, then walk away! There are too many horror stories to justify buying a car that doesn’t have matching VIN’s. 

Data check

An unbelievably simple way of finding out if the car has ever been stolen or written-off is the HPI data check. It takes 10 minutes and HPI will give you a detailed history report on that particular car – including information from the official sources like the Police and insurance companies. This is an absolute must do in today’s used car buying world!

Modifications

If you’re in the market for a small hatchback then be aware of the car with all the sparkly bits. Teenage drivers and ‘boy-racers’ enjoy modifying their cars and if you don’t have an eye for mods then you could end up buying a 1.2 Vauxhall Corsa with an 1100w sub in the boot – something not everyone will appreciate.

If you’re unsure on what an original and unmodified version of the car you’re looking at is, then just take a picture along with you of one that hasn’t been ruined and compare. Aftermarket spoilers and skirts tend to be a warning sign.

Oil check

Checking the condition and level of the oil in the car’s engine is a basic but effective way of checking that the engine is in good condition. The engine oil is the life-blood of the engine; without it, you’re not going anywhere, so make sure it has been well-looked after and has plenty of oil to keep it humming along.

If you’re a novice, all you need to do is find a rag, lift the dipstick, take it out of the engine, wipe clean, dip it back in and lift it out once more and check that the oil level is somewhere between minimum and maximum – if it’s not, then you need to think about your potential purchase and if it’s worth it.

George is a writer at Vcars.co.uk – check out their in depth guide to buying a used car for more tips (UK focus).