THE INTERMEDIATE GUIDE TO SECOND-HAND CAR LOANS

For the first time, people who are purchasing cars usually do not go for second-hand cars because of the interest cost, which can be higher and quite expensive, even if their preference is a second-hand car. The beginners who are just entering the driving world and are sceptical of their driving skills tend to swing towards used cars, but that too can turn out to be quite expensive. Hence, Muthoot Fincorp introduced a scheme known as used car loan to provide loans at a lower interest than banks or other institutions.

THINGS YOU SHOULD KNOW BEFORE APPLYING

There are specific vital components that the person should pay heed to before applying for a second-hand car loan. Some of them are as follows:

• The Eligibility criteria- Occupation- The person applying for loans should be a salaried individual or a self-employed individual.

• Age Group- Not everyone can apply for a loan; only people belonging to the age group of 21 years to 65 can apply.

• Residence - The person needs to have a permanent address where he resides for at least a minimum of 1 year. Relevant documents to be applied to prove it.

• Employment stability - The person worked for a minimum of 1 year.

• Connection - People who have a telephone or landline connection.

• Loan Amount - While applying for a loan, one should be sure of the amount that the person wants, which will help them sort their finances better.

• Interest rates - The interest rates differ with the institution from which the person will seek the auto loan amount. It has been observed that NBFCs like Muthoot Fincorp provide loans at a lesser interest rate than the banks. Banks are the most legalized institution with iron-clad rules; hence it becomes difficult for them to minimize the interest rates. Whereas NBFCs, though legalized, can enjoy absolute relaxation.

• Documentation – The most crucial part of applying for a loan is the documentation. The appliers must know which documents are required and when. NBFC sites have a detailed account of all the necessary documents at the time of application.

• Beneficial Schemes- NBFC loans come with added benefits, which make them quite approachable and affordable. For one, the most significant change that they made was giving loans based on income and not based on assets as done by the banks. Some provide a flat rate of interest on a loan, under which you can pay the interest on the principal amount till maturity. There is an option of pre-payment, which allows the person to pay the installment early. Other than this, they have included reduced EMI rates, zero interest rate on EMI, long tenure, and hassle-free, quick procedures.

• Repayment- the repayment options are flexible and drafted so that it is more beneficial for the customers. They allow very little time for repayment and are strict about the time. On the other hand, NBFCs provide flexible payment schemes, which can be extended to more than 60 months.

• Approval and Application Process- the application process is explained most lucidly on the official site. The person who is applying for the loan must first make a note of the fact that they are eligible to apply. After the eligibility part is over, the entire application process is relatively smooth.

• EMI calculator - EMI calculator has been observed to be useful for the customers who need to plan before applying for the loan. It digitally calculates the loan amount, interest rate, and principal amount to bring out the payable EMI amount and payable interest amount. It will make the applicant know about the exact amount that he/she needs to pay. It enables the person to apply for the loan to make proper arrangements ahead of the given time and pay monthly installments without any hassle.

CONCLUSION

Second-hand car loans are reigning in the market because certain NBFCs are offering affordable interest rates compared to banks, which makes it easier for people to repay the principal amount along with interest.

About This Author

Sandip Gupta Joined: April 26th, 2020