Check your credit score, compare lenders and more to make an informed decision when applying for a used car loan.
Buying a pre-owned car can be a wise financial move, offering you a budget-friendly option without compromising on quality. Despite being a cost-effective alternative, acquiring a used car still entails a significant financial commitment. In such a situation, a used car loan can provide quick access to the required funds.
With used car loans, you can easily fund the purchase of your vehicle and repay the cost in small monthly instalments. Offered by leading banks and non-banking financial companies (NBFCs), used car loans are a specialised form of financial assistance tailored for the purchase of second-hand vehicles. One of the leading NBFCs, Bajaj Finance offers high-value used car loans that come with the quick disbursal facility. With easy application and minimal documentation, Bajaj Finance makes used car loan borrowing hassle-free.
However, when applying for a pre-owned car loan, keep these tips in mind to secure a loan with better terms. Let’s delve into the key considerations.
Check your CIBIL Score: Your credit score also known as the CIBIL Score is the evaluation of your creditworthiness. This score is derived from your credit repayment track record.A lower credit score reflects poor debt management which might result in rejection of loan application or higher interest rates. Maintaining a high credit score enhances the likelihood of securing a used car loan with competitive interest rates. The CIBIL Score ranges from 300 to 900 and having a credit score of 720 or higher makes it easier to obtain a used car loan.
Compare lenders: Loan terms vary depending on the lender. However, to make an informed decision, it is important to compare different lenders and their loan terms. It is advisable to carefully evaluate which bank or an NBFC is offering the best terms basis your eligibility.
Avail pre-approved offers: Many financial institutions provide pre-approved loan offers to their existing customers.These personalised offers eliminate lengthy paperwork and help you save time. You can explore this option with your existing lender and avail of favourable loan terms.
Opt for shorter tenure: While lower EMIs can make long tenure a desirable option, it often results in higher interest outgo. Therefore, it is recommended to choose a shorter repayment period as it will help you save on the total interest amount. While the monthly instalment may be higher, the overall interest payment will be lower.
Keeping these factors in mind helps you avail of better terms on your used car loan. With Bajaj Finserv Used Car Loan, you can get up to Rs. 77 lakh and fund your second-hand car purchase with ease. With features such as competitive interest rates and flexible repayment tenure options, it’s an ideal solution to fund your used car purchase.
