From being a status symbol to a convenient mode of transportation, cars have become an essential part of our daily lives. Understandably, with a hike in car prices across the top makes and models of cars in the country, it has become harder to purchase a car of your choice. Fortunately, banks and non-banking financial companies offer easy access to auto finance in the form of low-interest rate car loans for the purchase of new and used cars.
Known as 'God's Own Country', Kerala has a lot to offer in terms of spices, coffee, tea, a delicious cuisine, backwaters, and palm-lined beaches. It is considered to be a tropical paradise in Southern India. Whether you are a resident of the state or a tourist, it would be convenient to own a car of your own in order to explore this beautifully-scenic place in comfort.
The price of a new car is higher than that of a used car. Therefore, purchasing a used car is a better alternative when you are low on funds. Banks offer 3 types of loans - new car loans, used car loans, and loan against cars. The interest rates on car loans vary depending not only on the types of car loans but also the lenders. To purchase a used car of your choice, you can opt for a used car loan with a low interest rate and flexible repayment options.
Here are some circumstances under which a used car can be a better choice than a brand new car:
Banks offer used car loans for most makes and models of cars as long as they are less than 5 years old and don’t exceed 8-10 years of age at the time of loan maturity. You can get a used car loan of up to 80% of the price of the car at an interest rate of 11-17% p.a. for a loan tenure of 1 to 5 years.
Any salaried or self-employed person with a good credit score and steady income can apply for a car loan. The eligibility criteria for a used car loan is as follows:
The eligibility criteria for a used car loan can vary from bank to bank. Therefore, it is advisable to check your car loan eligibility to avoid rejection. Keep in mind, multiple loan rejections can affect your credit score negatively.
The following documents can be submitted as identity, age, address, and income proofs:
Ensure the details furnished by you in the car loan application form are correct so as to avoid rejection.
Banks offer up to 80% funding for the purchase of pre-owned cars. Pick a well-maintained used car that is less than 5 years old. Most banks don’t offer used car loans for discontinued models. Here are the important features of a used car loan:
There are 2 methods of applying for a used car loan - online method and offline method. In the case of the offline method, visit the nearest bank branch, fill up a car loan application form and submit it along with the necessary documents for identity, income, age, and address proofs. In the case of the online method, visit the bank website to download the application form. Submit the duly-filled and signed application form along with the necessary document proofs on the website.
The bank will verify the details furnished in the application form along with your document proofs. Your application will be approved or denied based on your car loan eligibility. Upon car loan approval, the principal loan amount will be transferred to your bank account immediately. For existing customers, some banks reward loyalty with perks such as pre-approved car loans, minimum documentation, and instant loan disbursal.
Here are some top lenders providing used car loans in Kerala:
|Bank||Loan amount||Loan tenure||Rate of Interest|
|HDFC Bank||Up to 100% of the price of the used car or 3-6 times your yearly income||1 to 7 years as long as the age of the car at loan maturity doesn't exceed 10 years||11.50% p.a. to 17.50% p.a.|
|State Bank of India||Up to 2.5 times your net annual income||1 to 5 years||12.60% p.a.|
|ICICI Bank||Up to 80% of the price of the used car||1 to 3 years||10% p.a. to 17.65% p.a.|
In order to get the best used car loan deal, take the time to do some research. Compare various used car loan offers across the top banks on a reliable third-party website. Choose a used car loan with a low interest rate, a suitable loan tenure, a small-to-zero processing fee, and flexible loan repayment options.