Buying a used car is not only good for your wallet but also an ideal decision if you have recently learnt to drive. You can also consider buying a used car if you already own a car. Irrespective of the purpose of purchase or the budget you have, you can apply for used car loan to make it easier on your wallet. You do not need to compromise on the car you want to own or postpone the purchase. The loan application process is simple and hassle free and you can get it approved in no time. Here are a few things you need to know about the loan.
1. Eligibility: Different lenders have varying eligibility criteria and it is important to be aware about the same. You can compare the same online and then make an application. Most lenders require the applicants to be above the age of 18 and hold a valid driving license. Additionally, you will have to provide your identity proof, address proof and income proof for the application. Having a positive credit score can make a huge difference to the application.
2. Condition of the car: This is something that every car buyer should keep in mind. A used car loan is available only for those cars that are less than eight years in age. Hence, ask about the date of manufacturing of the car before you make a decision. Further, you need to invest in a car that does not require a lot of maintenance. Take a test drive and check the engine, lever, brakes and lights of the car so as to make the right decision. There are several used cars that are available for sale in the finest condition.
3. Down payment: In order to apply for the loan, you will have to make a down payment for the purchase. You can either make the minimum amount of down payment or if you have excess cash on hand, you can make a higher down payment. The balance amount will be your loan. Once the down payment is made, you can make the loan application. The minimum down payment requirement will vary from one lender to another.
4. Interest rate: Whenever you apply for a loan, it is advisable to compare the interest rate offered by the lender. Choose a lender who offers a used car loan at low interest rate. It will reduce the EMI and reduce the monthly outflows.
5. EMI: You can repay the loan in EMI over its tenure. Hence, get an EMI estimate from the lender so that you are aware of the monthly outflows you will have to manage. If you think you can make a higher EMI payment, opt for it.
Consider these five things when you apply for a loan for the purchase of a used car. Do not rush the process and remember to take a test drive in the car you have set your eyes on.