As per recent reports, the car industry is expected to transcend a growth rate of 15 percent in FY22. The second-hand car market has seen a surge in sales amidst the pandemic. With maximum population shifting to personal means of transport amidst the pandemic, the second-hand car market is attaining colossal heights. However, getting a Second hand car loan is not always viable to individuals. Therefore, people often search for other best ways to fund their car purchases.
Ideal Alternatives to Fund Second Hand Car Loan
Purchasing a second-hand car may fit into the budget; however, funding it with a car loan can become high-end for many. Car loans are considered predatory, as the interest rate offered is generally high; as a result, respective borrowers end up paying more.
Mentioned below are some better ways to fund second-hand car loans to mitigate additional monetary burdens:
- Top-up loan
Taking a top-up loan on an existing loan is an excellent option for funding a second-hand car purchase. The interest rate offered is quite affordable. Furthermore, the process of deriving funds from a top-up loan is much easier as the lending institutions already have prerequisite details regarding the borrower.
- Applying for personal loans
One can dodge the hassles of taking a car loan by opting for a personal loan. A personal loan comes with less stringent parameters and is ideal to finance one’s second-hand car purchase requirements.
Individuals need to cater to certain eligibility parameters to avail the best personal loans at a low-interest rate.
Benefits of a Personal Loan
There are multiple benefits of taking a personal loan over a car loan:
- High-quantum loan amount
An individual can get a substantial amount against a personal loan, up to Rs. 25 lakh. These funds can be used for multiple purposes, like purchasing a vehicle.
- Low-interest rate
Generally, the interest rate charged on a car loan is high. On the other hand, individuals can get a personal loan at an affordable interest rate, making the EMI payment affordable.
- Quick disbursal and flexible tenor
Borrowers will get instant approval for a personal loan, and the loan amount will be credited to their bank account within 24 hours*. Furthermore, borrowers will get flexible repayment tenor stretching from 12 to 60 months. One can get additional information regarding personal loans from the lender’s personal loan app.
A second-hand car loan will aid only purchasing a vehicle, which makes it highly stringent. A personal loan is versatile in that aspect. Therefore, one must know everything about personal loans for used cars to make the most of a personal loan.
A personal loan is a convenient option to fund a second-hand car. However, borrowers must adhere to the required eligibility criteria.
Eligibility Criteria for a Personal Loan
Though the eligibility criteria vary with lenders, the following are the most common ones-
- The applicant must be a residing Indian citizen.
- The potential borrower must fall in the age bracket of 21-67 years.
- A CIBIL score of 750 and above is ideal for instant approval.
- A person working in a reputed company with a stable income is more likely to get a personal loan.
However, there may be additional criteria for getting a personal loan for salaried individuals depending on the lender.
Furthermore, a personal loan comes with no end restrictions, and the borrower is not required to mortgage any asset to get a loan. However, borrowers must know about the common mistakes to avoid while availing of a personal loan for used cars.
Several leading NBFC’s like Bajaj Finserv provide pre-approved offers on financial products like business loans, personal loans, etc. These offers elevate the lending process. Individuals can check their pre-approved offers by entering their name and contact details.
Besides, multiple pre-owned vehicle selling platforms have ties with several lenders. They can offer second-hand car loans at an affordable price. Borrowers find this platform ideal as they get funds at cheaper rates which helps in their second-hand car purchase. On the whole, individuals seeking to buy a second-hand car can adhere to any of the alternatives mentioned above to fund their second hand car loan effectively without burdening their disposable income.