The pre-owned car market is even bigger than the new car market and hence the demand for finance for the same cannot be neglected. So, if you are amongst one who have zeroed in the pre-owned car and now looking for the suitable loan option for it. Here are some pointers you need to account for without fail:
For securing a certified pre-owned car it is better to go pre-owned car loan instead of personal loan
With the formal pre-owned dealers who now provide well maintained pre-owned cars, financing for these is much easier with a pre-owned car loan financed by banks and NBFC companies. These are better in comparison to personal loans with competitive rate of interest as well as due to secured nature.
The processing and disbursal of such a loan is not dependent on one's credit score and hence can be availed with lesser hassle.
Loan value disbursed: Both public sector players as well as NBFC companies are into providing pre-owned car loans and while some disburse 80% of the insured declare value as loan amount. Others even hand over 125% of the vehicle value as loan.
Interest rates: Interest rates for pre-owned car loan is usually in line with personal loan rates. And this said, it is usually higher than the new car loan interest rate and falls in the range of 11-15%. Both fixed and floating rate options are available depending on the lender you choose to borrow the funds from.
Fees: Banks usually charge a processing fee that may be as high as 2% and there are other institutions who charge a fixed sum as loan processing amount regardless of the loan amount disbursed.
Tenure: The tenure is dependent on the lender and can be up to 5 years. Billing date of the pre-owned car is also factored in when deciding the loan repayment. By this we means, from the original date of purchase, the lender allows few years time during which the repayment has to be made.