Getting a loan for a used car can be difficult, but it is still possible to get the best deal. Keep in mind that financing a used car can be more expensive than getting a loan for the new car. And many dealers ask you to pay at least 50% of the value of the car while the rest can be financed.
The first thing you need to do is to get a garage mechanic or a pre-owned car dealer who can help you analyze your car and let you know if any major faults can be found.
The process of getting a used car loan is not so different from that of getting a car loan. But the cost incurred to get a loan for a used car can be more, in terms of the rate of interest. As normally this loan is technically a Personal Loan, but you end up buying a used car. If in case you directly approach a bank in order to get a Personal Loan for a used car, you might get a high rate of interest. Additionally, you can also let your bank know that you are buying a used car, as they might help you with a low rate of interest. Also, you have an option to go to these pre-owned car shops that help you with the lowest rate of interest possible.
If you having trouble getting a loan from a lender directly, you can approach car dealers, who have contacts with all these banks. However the rate of interest, in this case, can be high, and you might end up paying a high processing fee also.
If you take a Personal Loan for a used car, it is advisable to ensure that you have a good credit score. If your credit score is low, it is better to wait till you improve your credit score so that you can get a Personal Loan at a lower rate of interest.
Documentation Required for the Personal Loan to Buy a Used Car:
Normally the documents are the same as when you apply for any Personal Loan. Here are some of the general documents any bank may require to give you a loan:
1) Complete application Form with on passport size photograph
2) Proof of Identity (PI)(any of the following)
3) Proof of Present Residential Address
4) Proof of age
5) Financial/Income documents required for resident Indian
A used car can prove to be really helpful to an individual or a family depending on their practical needs and budget. But by making the correct financial choice, it can be ensured that you get the most competitive loan offer.