Comparison Table of Used Car Loan Interest Rate:

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7 Features and Benefits of Used Car Loan:

• Flexible payment terms are offered by certain lenders.
• The documentation process are simple and minimum paperwork needs to be submitted.
• Depreciation rates and insurance cost are lower for a used car when compared to a new car loan.
• The used car loan amount will be less when compared to a new car loan. Therefore, the monthly payments will reduce.
• Up to 90% of the used car’s value may be provided as a loan.
• It is easy to apply for the loan for used car and most lenders allow you to complete the process online.
• Most banks offer a long repayment tenure for old car loan.

Benefits of Used Car Loan:

In India, apart from the issue that paying such a huge sum of cash may disturb one’s budget, massive purchases with liquid cash could put you on the Income Tax department’s radar as well. When you get a loan to pay for your car, you manage to retain your savings for other current and future expenses. One of the greatest used car loan benefits in India that the loan is secured against the car itself, so, you do not have to mortgage your property or other assets to get a used car loan. You also get to use your car while you are servicing the car loan term, so a few years down the line you have added to your original savings and have the opportunity to own the car having paid off your car loan completely. This gives you the chance to augment crucial credit history by procuring a car loan and strictly adhering to the repayment cycle. A good credit history including timely payments and cleared debts help you obtain further loans in the future. Car loans, therefore, are a very safe and certain way of purchasing your own car.

Used Car Loan EMI Calculator:

If you wish to calculate the monthly payments, you can use the car loan EMI calculator offered by LoanCracker. Apart from being easy to use, the calculator helps in saving time as well. Details such as the rate of interest, loan amount, processing fee, and repayment tenure must be entered to calculate the EMI. The details will be displayed almost immediately.

8 Factors that Affect Used Car Loan Interest Rates in India:

These are the 8 main factors that affect the used car loan interest rates in India are mentioned below:

• Debt-to-Income Ratio: Your debt-to-income ratio is an important factor that is considered when determining the used car loan interest rate. The ratio determines whether you can pay the EMIs on time. Your application will be rejected, or the interest rates will be high if your debt-to-income ratio is high.
• Increase the down payment: Lenders offer Used Car Loan at low interest rates if you make a high down payment. Your EMIs will also reduce since the principal amount is low. Paying a high down payment also shows lenders that you financially sound and can repay the loan.
• Relationship with Bank: You can contact your current bank before choosing any other lender. Lower interest rates may be provided if you have a good relationship with the bank. The Used Car Loan interest rates can also be negotiated with your current bank.
• Vehicle Age and Model: No security will need to be provided when availing a used car loan. If the monthly payments are not made, the car will be seized by the lender. Therefore, the age and model of the car is taken into account when the interest rates are determined. Lower interest rates are provided for newer cars. Interest rates may also be low if the car is from a reputed manufacturer.
• Income: Lenders check your income when they determine the interest rates for used car loan. Individuals with a steady income and a stable occupation may be provided a used car loan with a low interest rate. The company you work for is also considered when determining the interest rates.
• Credit score: One of the most important factors that is considered when determining the used car loan interest rates is your credit score. The credit score also determines whether you will be eligible to avail a used car loan. Individuals with a good credit score are provided loans with a lower interest rate. Your loan application will be rejected, or the interest rates will be high if the credit score is low.
• Repayment Tenure: Lenders offer low interest rates in case you opt for a longer tenure. However, you will end up paying more interest. Even though the interest rates are high for a shorter tenure, the overall amount that you pay for the used car will be low. Therefore, it is vital that you check the EMI before opting for the repayment tenure.

FAQs:

1- Is it mandatory to provide a guarantor when I avail a used car loan?
No, it is not mandatory to provide a guarantor when you apply for a used car loan. However, if you do not meet the credit criteria, the lender may ask for a guarantor to be provided.

2- Will there be any charges levied in case I prepay the car loan?
Yes, lenders usually charge a certain amount if you prepay the used car loan. Depending on the bank, the charges will vary.

3- Who can avail a used car loan?

• Hindu Undivided Families (HUFs) and Trusts
• Private and Public Ltd. Companies
• Partnership firms
• Self-employed individuals
• Salaried employees

4- Do I have to provide collateral or security when I avail a used car loan?
No, you need not provide collateral or security when you avail a used car loan. The car acts as security.

5- What are the different methods by which the loan can be repaid?
These are the 3 different methods by which the loan can be repaid are mentioned below

• ECS
• Direct Debit
• Post-Dated Cheques