You can get a pre-owned car loan from various lending institutions to purchase a used or so-called second-hand car. The terms and conditions involved in the loan agreement, including the charges, will differ from one lender to another. However, depending on your credit profile, you are likely to get a better offer on the interest rate, loan amount, and repayment tenure, from a personal loan. Ask your lender about the features of their personal loan, such as overdraft loan facility, before finalizing any deal.
Undoubtedly purchasing a used car has its financial advantages. But more often than not, people going for a second-hand car struggle to arrange funds. It can happen that you might get a very good deal on a car fit for your needs, but you have to come up with the money within short notice. If your resources are limited, opting for a pre-owned car loan might be the right decision for you.
Here are 5 smart ways to bag the right loan and drive off with a pre-owned car!
1. Visit Lenders
Do your research and come up with a list of lending options. Visit every lender offering a quick loan for used cars. Either make a trip to their nearest branch office or visit their website. Thoroughly check out their deals, documentation, and other processing details. Compare the rate of interest and the loan amount they are offering, along with other facilities, like quick disbursal, flexibility in repayment, etc.
2. Talk It Out
Do not be hasty in your decision. Discuss the loan offer in detail with your financing company. Ensure that there are no hidden clauses involved in the agreement. Find out the eligibility parameters for the loan amount you are applying for, and work out a deal with the repayment tenure, and EMI options you are comfortable with. If you are planning to foreclose or prepay the loan in part or full, enquire about their prepayment charges as well. Also find out whether they provide personal loans with flexible facilities, including an overdraft loan facility.
3. Know Your Options
A pre-owned car loan entails multiple factors that might be out of your control. The loan amount is based on the valuation of the car, done by the lender, and hence the lender can quote a lower price than the seller. Also, the repayment tenure will depend on the age of the car. In comparison, a personal loan will be easier to get and most probably even have a lower processing fee. If you qualify for a flexible personal loan, a friendly piece of advice would be: get personal loan.
You will be asked to submit documents to your lender to start processing the loan application. Upon successful verification of your documents, your application for the quick loan will be approved and subsequently, funds will be disbursed. The documentation process and the turnaround time for approval and fund disbursal vary from lender to lender. You might want to choose a lender with minimal documentation and the quickest disbursal time.
5. Take Possession
Make the down payment with the money obtained from the loan and take possession of the car.
Although a personal loan is an easy option to obtain quick loans, the decision of whether to get personal loan or not depends on the facilities offered. Bajaj Finserv, for instance, offers their Personal Loan with instant approval, disbursal in 24 hours, minimal documentation and easy eligibility criteria. Withdraw money as and when required from a single sanction and repay within the tenure. This is called an overdraft loan facility. You can get quicker access to funds with their pre-approved offers on personal loans, home loans, credit cards, etc. To check your eligibility, submit your name and contact details on their website.
If you get suitable loan terms, it will be a smart idea to get personal loan for buying a used car.