Delhi Used Car Loan

Delhi, the capital of India, is a bustling metropolitan city where almost everyone has something to do and some place to be. The ancient and the modern aspects of the city blend perfectly well together to gives it its uniqueness. With its abundance of monuments and companies and conglomerates, it is a popular destination for vacationers and job seekers.

Owning a car in Delhi

Given the popularity of Delhi, travelling from one point to the other within the city can be a bit of a hassle. Having your own vehicle can make it much easier to move around instead of waiting endless hours for public transport that either seems to be too full or never seems to be on time. Many daily commuters rely on bikes and scooters too, but when it rains heavily or when the summer heat is at its peak, a car proves to be a much better option.

Why are used cars a better option?

Whether to get a brand new car or a used one is a common dilemma everyone faces. Although the feeling of owning a brand new car can be exhilarating, the choice of buying a used car takes the upper hand. Here’s why owning a used car is a better option for you.

• Lesser Cost: Price is an important deciding factor when it comes to purchasing any product. Buying a used car helps you save a lot of money as you do not have to pay the original value of the car. Plus, if you have set your mind on purchasing a particular car, you can even choose a slightly older model to suit your budget.
• Slower Depreciation: The value of each car available on the market depreciates with time, and depreciation is highest during the first 3 years after a car is purchased. When you decide to buy a used car, you can get it after it has already undergone major depreciation. So, you will lose less money over time when you buy a used car instead of a brand new one.
• Fewer Taxes: A new car on the market comes with a lot of expenses, such as insurance charge, RTO charge, extended warranty charge, handling charge, and other miscellaneous charges. This can make the car cost a lot more than its mentioned ex-showroom price. You will be able to save on these expenses when you go for a used car. It can be even cheaper for you if you buy one that is already insured.
• Tension-Free Drive: With a used car, the tension of getting a scratch or a dent is usually much lesser than with a brand new car, especially if you are a new driver. You will definitely worry less about driving your car through congested traffic, bad roads, and narrow lanes.
• Certified Cars: With the increase in popularity of used cars, many certified and reliable used car dealers have come up. They get the car checked by certified engineers so you don’t have to worry about being conned by unreliable salesmen.

Used car loans

Used car loans come in very handy when you want to purchase a pre-owned car and do not have sufficient funds to do so. Various banks and non-banking financial companies (NBFCs) offer used car loans, but the terms of the loan may not always be very beneficial for the borrower. Here are some features of used car loans you need to consider before applying for a used car loan.

Interest Rate and Tenure: Although used cars cost lesser than brand new cars, used car loans may have a higher interest rate and a shorter tenure than general car loans. Used car loans can usually be availed for up to a period of 5 years, while some lenders may be willing to lend only up to a period of 36 months. Since the rate of interest and the loan tenure will determine the value of equated monthly instalments (EMIs) you need to pay, it is important to take these factors into consideration before applying for a used car loan.

• Down Payment: Most banks require you to make a down payment of up to 20% of the on-road or ex-showroom price of the car you wish to buy, while some NBFCs may require you to pay only 10% of it. How much each bank or NBFC is willing to finance you varies with each one.
• Processing Fee: Loan issuers will charge a small fee of about 2% of the entire loan amount to process your loan. The principal loan amount that will be disbursed to your account will have this charge deducted from it. Banks and other financial companies may waive this amount off but it depends entirely on their terms and conditions.
• Prepayment and Preclosure Fees: Prepaying your loan amount can be beneficial as it helps you save on the interest amount. After you have paid 12 EMIs, most lenders offer you an option to make part payments or full prepayment in order to pay off the loan before the end of the tenure. However, lenders may charge you a prepayment or a preclosure fee, which varies from one financial institution to another.
• Foreclosure: At the time of loan disbursal, borrowers have to sign an agreement that pledges the car as security. In an event you default your used car loan by repeatedly failing to pay EMIs, the bank will repossess the car and sell it in an auction to try and recover the remaining loan amount, which is known as foreclosure. Such an event will negatively impact your credit score and will make it difficult for you to secure a loan in future.

How to apply for a used car loan?

Applying for a used car loan is relatively easy and you can do it in 2 ways: online and offline. When applying for a car loan online, you will need to visit the websites of different banks and check what they have to offer. Once you have done that, you can download an application form, fill it, and submit it along with the required documents. An agent from the bank will get in touch with you to take the process further.

To apply for a used car loan offline, you will need to visit a bank branch, ask for a car loan application form, fill it, and submit it along with your documents. The bank will look into the loan application and will approve or deny the loan based on your eligibility. When the loan is approved, the principal loan amount will be disbursed into your bank account.

If you have been using the services of a certain bank for a long time and if your credit history is good, the bank may offer you a pre-approved loan. Such loans are processed very quickly and the loan amount is immediately disbursed into your account.

Documents required to apply for a used car loan

To avail a used car loan, you will need to submit your identity, address, age, and income proofs. Here are some of the documents you need to submit.

• An Aadhar card, voter ID card, PAN card, or passport as proof of identity.
• A ration card, utility bill, or passport as proof of residence.
• A voter ID card, PAN card, passport, birth certificate, or driving license as proof of age.
• 3-6 months’ salary slips and bank statements or form 16 as proof of income.

Car loan eligibility

Lenders offer used car loans who meet certain eligibility criteria, which can vary from one lender to another. The basic eligibility criteria for used car loans are the following:

• An applicant must be between the ages of 21 and 65 years.
• He or she must have a minimum of 2 years of work experience in the same field.
• He or she must be a salaried individual or self-employed.
• He or she must have a stable income of at least Rs.2 to 4 lakh annually.
• He or she must have a credit score of 750 and above.

Compare used car loans in India

Comparing loans offered by different lenders will have you know your options. Once you have all your options laid out in front of you, you can choose the one that best suits your requirements, and submit your application.

Here are some of the offers on used car loans in Delhi.