When someone needs to commute daily, a car becomes a necessity. Also, having a four-wheeler holds an aspirational value that indicates your status. You can either use your savings to buy a pre-owned/new car or finance it with a loan. Most individuals prefer the pre-owned one and consider a loan for used cars. While many others may want to save and then buy a car.
This post may help individuals make an informed decision to own a car.
Savings vs New Car vs Used Car Loans
The first thing to consider before deciding on the brand and model of the car is your budget. It helps you decide whether to select a new or a used car.
Second, if you do not have enough money, you can wait and start saving until you have enough money to buy an old/new car. It does not seem a viable option.
Instead, you can plan to take a loan to buy a car. Also, before proceeding with the loan, you must check if you qualify for a Car Loan. Customers can use an online Used Car Loan EMI calculator to check their eligibility for the required loan amount.
Why Prefer a Used Car Loan
Here is why you should borrow a Used Car Loan:
- Low Down Payment: Low down payment facility for a used car makes it a pocket-friendly financing option. It attracts more customers. Lenders can provide a loan for up to 95% of the car’s IDV (Insurance Declared Value). Hence, you don’t need to take the burden of high expenses towards the down payment.
- Numerous Car Options: Individuals can buy their dream car using a loan for used cars. This segment covers numerous cars, including MUVs and SUVs. And in the case of cars older than 10 years, there are high chances of getting attractive loan offers under special schemes with reputed lenders.
- Affordable Loan Cost: Leading lenders can help customers buy a car with an affordable loan since the interest rate starts from as low as 8.50%. The lender offers an interest rate to a customer depending on several factors, including the car’s age, loan tenure, applicant income, etc. When you have a CIBIL score of 750+, you can reduce loan interest rates. It is good to prefer a newer used car, say a two or three-year-old, instead of a five-year-old car to reduce the interest rate. Utilise a Used Car Loan calculator provided by the lender to know the applicable interest rate.
- No Income Base Loan Option: Many renowned NBFCs offer loans under a no-income base. And in this, the borrowers don’t need to present their income proofs.
- Easy Repayment: Used Car Loans are offered with flexible repayment options. These loans are flexible enough with repayment tenure up to 20 months. It helps customers repay loans in easy EMIs (Equated Monthly Income). A Used Car Loan calculator can help borrowers choose the right loan tenure.
Thus, by using a Used Car Loan, customers do not need to face the unnecessary financial burdens of making a one-time payment towards the car cost. It is good to utilise an online Used Car Loan calculator to know the loan amount and interest rate offered.