Pune is one of the largest city in Maharashtra, second only to Mumbai. It has a large number of educational institutions, making it one of the major educational hubs of the country. For this reason, it attracts many students from within the country and from abroad every year. The city is also a very popular tourist destination because of its rich history, abundance of spectacular monuments, and pleasant sceneries.
Since Pune is a large city in terms of area, it has a very good network of public transport such as local trains and buses. Although there is no shortage of public transport within the city, it can be a bit of a hassle to board one during rush hours. In such situations, it does help to have your very own car. You can commute to work or can travel to nearby destinations with ease and on your own terms. Holding the steering wheel of your very own car also has a special feel to it, which can give you a sense of accomplishment.
Used cars have a number of benefits and here are some of them:
The funds you have at your disposal may not always be enough to buy the car you desire. Luckily there are financial lending institutions like banks and non-banking financial companies (NBFCs) that offer loans for new cars as well as used ones. These institutions offer loans of up to 90% of the total cost of the pre-owned car. Some lenders may offer even more depending on their terms and conditions.
As long as you are a salaried or a self-employed individual who meets the eligibility criteria set by the bank, you can get your used car loan approved. You can repay the principal loan amount along with the interest in the form of equated monthly instalments (EMIs) over a specified tenure.
Here are some financial institutions that offer used car loans in India:
|Lender||Loan Amount||Interest Rate||Processing Fee||Tenure|
|HDFC Bank||Up to 90% of the purchase price of the used car||11.50% to 17.50% p.a.||Rs.5,000 or 2% of the used car loan amount (whichever is lower)||1-7 years (the age of the car should not be more than 10 years by the end of the loan tenure)|
|Sundaram Finance||Up to 85% of the purchase price of the used car||12% to 14% p.a.||Rs.2,500 (a one-time processing fee)||1-3 years (the age of the car should not be more than 8-10 years at the end of the loan tenure)|
|TVS Credit Services||Up to 85% of the purchase price of the used car||13.1% to 15% p.a.||Rs.9,99 + GST||1-5 years|
|Kotak Mahindra Prime||Up to 90% of the purchase price of the used car||15% to 20% p.a.||Rs.3,300-4,750 with applicable service tax||1-5 years|
|ICICI Bank||Up to 80% of the purchase price of the used car||10% to 17.65% p.a.||Rs.6,000 or 2% of the used car loan amount (whichever is lower)||1-3 years|
The eligibility criteria for used car loans are the following:
The eligibility criteria of different lenders may slightly vary from one another. Checking the websites or talking to their customer care executives of each lender will give you a clearer idea of whether you are eligible for a used car loan or not.
The chances of your loan getting approved or rejected depends on your eligibility. Before you send in your loan application, you need to make sure that you are eligible for a used car loan because a loan rejection can negatively impact your credit score. A bad credit score will make it harder to avail a loan from future loan prospects.
In order to avail a used car loan, you need to submit your proof of identity, age, income, and address. Here are a few documents you can submit to the bank:
In order to apply for a used car loan online, you first need to visit the websites of different banks and non-banking financial companies. Check each feature of the loan, such as interest rate, processing fee, prepayment and preclosure fee, and tenure. Compare the offers from each bank and choose one that best suits your requirements and is financially beneficial to you.
Once you have made a choice, download their application form, fill it, and submit it along with the mentioned documents. After you have successfully submitted your loan application, an agent of the bank or NBFC will get in touch with you to take the loan application further.
Calculating your loan EMI manually is a tedious process and is prone to errors. Luckily, there are many online tools available that help you calculate your EMI with ease. All you need to do is input the car loan amount, tenure, processing fee, and interest rate into the tool. You can then click on the ‘Calculate’ button to get accurate results instantly. You can input different combinations of these values, according to what different banks have to offer, to make comparisons and to see which offer suits you best. Some tools not only show you the EMI amount but your repayment schedule in the form of an amortisation table.
Being extra careful when dealing with things that involve money will save you from getting into a sticky financial situation later on in life. Although owning a car is an exciting feeling, you should never rush yourself when applying for a car loan. Take your time and make sure you have all the necessary information before you commit yourself to repaying a huge loan amount over a specific period of time. Here are a few things to consider before availing a used car loan:
When availing a used car loan, it is advisable that you know what you are getting yourself into. Read the terms and conditions of the loan carefully and plan your budget well. If you feel you will be able to handle the financial burden, only then, go ahead with the loan application.