As per reports, during the financial year 2018-2019, around 4 million second hand cars were bought and sold. The reason for the same can be acknowledged to the growing inclination of fair value against their money.
Additionally, the fact that leading NBFCs are extending substantial second hand car finance against simple eligibility criteria is another potent reason.
Regardless, before applying for such credit options, individuals must take into consideration a few important things.
To begin with, the following highlights what one should keep in mind –
Rate of interest
Usually, second hand car loans come with a relatively high rate of interest. However, to ensure that individuals secure the best bargain, they should compare the rates offered by the lending institution. Subsequently, they should take into account the features extended by each loan option and then base their decision on it.
Likewise, individuals must understand that the tenor offered is usually based on the car’s condition. A car that has been in use for a long time and requires substantial maintenance would attract a short tenor or reject the application altogether.
As a means to ensure swift approval of second hand car finance, applicants must submit all the required documents requested by the NBFC. Generally, applicants have to submit their KYC documents, extend their proof of income like bank account statements and salary slips or income tax returns.
4. Approval process
Usually, the approval process takes 3-4 days to complete owing to the thorough verification process. For example, checking the registration certificate and scrutinising the insurance document requires a significant amount of time. Regardless, by opting for an institution that follows a relaxed approval process, one can avail such loans quickly.
5. Car insurance
Most institutions are reluctant when it comes to sanctioning second hand car finance for a vehicle that has been in use for over 10 years. Additionally, the application is often rejected if the car insurance has not been renewed and the vehicle is not registered under the seller’s name.
Therefore, before availing a personal loan for used cars, consider these points. Doing so, individuals would be able to streamline its entire process effectively.