When a person is planning to buy a car, it comes with several important factors such as budget, type of car, old or new, services, insurance, or whether you’re looking for a loan. If you’re looking for a car under budget, then buying a second-hand car on loan can be a great alternative where you’ll get flexible EMIs, lower second hand car loan interest rate, and less paperwork.
By doing detailed research, you can find the best lender who provides second-hand car loans with lower interest rates.
This guide will help you to understand everything about a second-hand car loan, its benefits, interest rate, and how to use a second hand car loan EMI calculator to estimate your budget.
What are the different factors that impact your second-hand Car EMIs?
If you’re interested in a second-hand car purchase, you s2ndhould check out the factors that influence your second-hand car EMIs to ensure that the installments are just fine for your income.
Your credit score is essential when applying for any loan. So make sure to maintain it.
Your EMIs are determined based on your income, and your installments increase with your debt-to-income ratio.
As the tenure of your loan increases, the EMIs get more divided, easing off the burden.
If the down payment is paid in larger amounts, the EMIs and the interest rate for some banks drop.
The Model and Age of the Car
The models that have a better resale value or have been used for a short time can decrease your loan EMIs.
What are the Benefits of getting a loan on a second-hand car?
Have you considered taking a second-hand car for its depreciated value but doubted other features? Well, listed down below are the benefits you’ll avail yourself from receiving a loan on a second-hand car:
Second-hand cars or used versions are far more affordable than their newer counterparts.
The depreciation value of a car can drastically fall, but with older cars, this process is slower.
The additions you want on your new car might become a lot of baggage. And with old cars, these already installed accessories are no longer an issue.
A second-hand car is already at its depreciated value, lowering its insurance cost.
If the car has been in use for only a couple of years, the performance is just as nice as you’d get at its first purchase.
What are the various eligibility criteria to get a second-hand car loan?
Should you mind getting a loan to purchase a second-hand car? Checking out the criteria will save you a lot of fuss and confusion. Eligibility criteria are crucial in any monetary field to ensure the procedure can go smoothly.
- Loan application has age criteria above 18 years.
- You must be employed at a company or have a business.
- Minimum 2 years of work experience required. And must have worked the last six months at the current workplace.
- Business holders are expected to be in the industry for at least a year.
What are the different documents requirements for getting a Personal Loan?
We have listed the various document requirements to apply for a personal loan down below:
- For the verification of identity, documents such as the driving license or AADHAR card are needed.
- Address proof such as a copy of your passport or voter ID.
- Salary slip of the past three months in your company.
- Bank statement for last three months income stability.
Which factors influence the interest rate for your second-hand car?
After choosing the right car and getting your hopes high on the lowered second hand car loan interest rate, you should not be bothered, right? Yes, but don’t forget to consider all the factors influencing interest rates.
Higher Down Payment
The more you pay at the time of purchase as your down payment, the lower will be the second hand car loan interest rate.
A low to average debt-to-income ratio will assure you get the loan sanctioned with a lower second hand car loan interest rate.
Your credit score is significant for getting loans at reasonable rates. Hence, try maintaining a good credit score.
Age of the Car
When buying a used car, know that second hand car loan interest rate go up according to the increasing age.
What is the interest rate for loans on second-hand cars?
Some banks charge second-hand car loans at interest rates of 10% per annum, while others in the market can take that up to 13% to 16%. However, the model and age of the car play a significant role.
How can an EMI calculator help?
The following are the ways second hand car loan EMI calculator help you:
- It helps derive an estimated EMIs amount by helping you plan your budget.
- It will help you figure out complex calculations, saving time.
- No miscalculation is expected from a second hand car loan EMI calculator.
- All the loans have different EMIs structures; hence, a specific second hand car loan EMI calculator will save you the mental hassle.
- It helps you maintain your debt-to-income ratio.
With the increasing rates in the market, going for a second-hand car with a good reliability score can save you a ton of debt. To ease your job and pockets, you can opt for second-hand car loans. Nevertheless, don’t forget to try out the second hand car loan EMI calculator to get you a perfect estimate of your budget.