For the majority of us, buying a car is a huge dream come true, while purchasing a new automobile is usually out of reach for the majority of people, a second-hand car can assist you in achieving your vehicle goals. In India, the used car loan interest rate is often between 12% to 16%. While purchasing a used automobile, the borrower can obtain a second-hand car loan for 90% to 100% of the car’s market value based on their credit rating. However, before applying for a second-hand car loan, make sure to check eligibility and take the appropriate measures.
Features & Advantages of a second-hand car Loan
- Hero Fincorp provides flexible repayment terms.
- The documentation procedure is straightforward, with just minimal documents required.
- When compared to a new car, second-hand cars have reduced depreciation rates plus insurance costs.
- When contrasted to a new vehicle loan, the amount owed will be lower. As a result, the installments will be reduced.
- It is simple to apply for a loan, and most lenders enable you to do so online.
- Most banks provide a lengthy payback period.
What Different Elements Contribute to used car loan interest rate?
-
Creditworthiness
Your credit score is a significant aspect that might affect the rate of interest on your used automobile loan. A good credit score reveals that there’s no danger in giving you money because your history demonstrates that you have been paying your payments on time, according to the score.
-
Relationship to the Lender
In terms of payment transactions, it’s critical to keep a positive connection with your lender. Since they could let you know if they are providing used auto loans at a lower interest rate. So be cautious to speak with your current lender first before seeking out any other lenders for a second-hand car loan.
-
Payback Period
Your used car loan interest rate will be significantly influenced by the loan’s term. People who choose a longer loan term will have lower EMIs overall, but they will be required to pay a higher interest rate throughout the course of the loan. On the other side, shorter-term loans have lower interest rates but larger EMIs.
-
Loan Amount
The amount borrowed for a used automobile loan has an impact on the interest rate applied to the loan. If you choose a larger loan amount, you can receive a cheaper interest rate and vice versa. This varies depending on the lender.
-
Income
Since a high income suggests a good ability to repay your loan, those with greater than average incomes may benefit from a low-interest rate.
-
The ratio of Debt to Income
The debt-to-income ratio is a significant aspect taken into account when calculating the interest rate for a used automobile loan. Depending on the percentage, you can either make timely EMI payments or not. If the debt-to-income ratio is excessive, your application would be denied or the rates of interest will be exorbitant.
Conclusion
When you look for a used car loan interest rate option from a reputable lender, you may own the car of your dreams without having to sacrifice much of your funds. Check out the tailored financing for used cars from Hero Fincorp. On a few models, we provide financing up to 100%, competitive interest rates, and flexible payback terms. To find out more and to apply now, visit our website!
