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 car 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!
