The used car market is as old as the car persists themselves.This market is growing rapidly in India. Companies like Maruti Suzuki and Mahindra have come up with the idea of used car industries. Depending upon the age and the Kilometers the car has run, one has to decide the price. Buyers also believe used cars in Mumbai on loan are the best when compared to other metros.As the used car demand is increasing, a large number of lenders (both government and private financing firms) have come up for financing.
Few tips are stated below on how to choose the correct options in terms of finance:
- Getting a loan for used car is not that easy as a new one. Banks normally offer 70% to 80% on used car, whereas for new car they may go up to 90% of the total cost. The main disadvantage is that the interest rate is high and the loan terms are for shorter period of time,which is not the same for new cars.
- Choose the model that suits your requirement. Most of the banks and finance companies verify the age and model before sanctioning the loan. Therefore, it is advised to prefer new models when buying a used car to avail used car loan.
- After applying for the loan amount, check for the loan terms and conditions and how to pay the EMI.Monthly income should be very good in order to pay the EMIs. There are number of online car loan calculators that can help in decidingthe loan amount one can afford.
- There are so many banks and financial institutions available in the market that provides finance for used cars. Always compare the best option available before selecting as it varies from bank to bank. Keep in mind the interest rate will be high for longer repayment periods.
- Sometimes, the seller may ask for token money (advance) in order to book the car and it takes time for clearing the documentation process for loan.In the meanwhile, seller closes the deal with another buyer and refuses to return the amount as so-called token money is non-refundable.
Always get an agreement in writing to save yourself from any type of issue later. All banks ask for source of income or stability of the borrower.Fill and submit the required form and on approval you will be eligible for used car loan.