Factors to take into Consideration When Availing Used Car Loans

When people usually think of buying a car, many of them would probably think of purchasing a second-hand or even a used-car; rather than a 'brand new one'. This is simple for the reason that it is less risky to drive a used car as opposed to a new car when you obtain a licence. Majority of the people who do, often seek financial aid when purchasing their first vehicle can rest assured that banks and financial institutions offer different financing options for the same. 

Applying for a car loan is often one of the preferred options by many car buyers, whether for new or used cars. Banks provide many different types of car loans; all offering different features. Besides this, there are also many car loan providers such as car dealerships which offer many different car loan options to people in India. Some of the different TYPES of loans include new car loans, pre-owned (used) car loan and a loan against car. Many of the car loan providers also offer different types of schemes for these loans. Some of them include margin money scheme, security deposit scheme, advance EMI scheme, lease financing purchase and hire purchase scheme. 

There are many different factors which need to be taken into consideration when availing for used car loans. Some of the factors include:

1) Model & Type of car: Banks and/or other financial institutions pay attention to the age of the vehicle, type and model before the issuance of the loan. It is always advisable to opt for a relatively newer model that is recently designed than an older version one.    

2) Total amount of car: Once the model of the car has been selected, it is very important to calculate how much money you are willing to put on the deal. Once this is calculated, you will have a good idea of how much loan you should take up.

3) Requirement: After you decide the loan amount that you require, it is very important to decide the tenure and the installments that will be paid either on a monthly or periodic basis. It is very important to take into consideration factors such as annual monthly income and even future predictions.  After this it becomes relatively easier to find sources for the loan that is required. 

4) Browse options: Most of the banks and financial institutions offer used car loans. It is very important to compare the loans that are offered by different banks as they will have different interest rates and different features. Some of these may include banks such as ICICI Bank, HDFC Bank, SBI bank or even institutions such as Magma Fincorp.

5) Necessary documents for verification: When availing these loans, various documents are required for the same. Authorization as well as attested proofs of the car purchase, income stability of the person (customer) and/or any other document that has been requested from the bank/financing institute. Only once these documents are submitted can a person avail the loan.