Top Things to Consider Before Applying for a Used Car Loan in India

Top Things to Consider Before Applying for a Used Car Loan in India

Buying a car is a huge financial decision and involves lots of emotions. However, you need to be practical and try to find ways of saving money. A used car is a good choice if you are a first-time buyer, as it allows you to gain confidence while being an affordable option.

Just like when you buy a new car, you can avail of finance for its funding. However, before you choose this alternative, here are five things you must consider:

  1. Loan amount

It is advisable that you check the price of a new car and then explore second-hand options of the same model. Try to borrow a lower amount to save money in the long-term and to stay within your budget. If you buy a high-end car, you will need to borrow more and spend heavily on its maintenance.

  1. Rate of interest

The used car loan interest rates may be slightly higher than the interest for a new vehicle loan. Compare the rate of interest offered by various lenders to make an informed decision.

  1. Loan tenure

Although longer repayment tenure is available for used car finance, it is not always the best option. Remember that the longer the duration, the higher will be the total interest payout. Therefore, based on your financial situation,opt for a repayment period that will not cause any liquidity crisis while reducing the total interest paid over the years.

  1. Down payment

Some lenders like Mahindra Finance offer up to 90% of the price as the borrowed amount based on your usedcar loan eligibility and other conditions. However, if your monetary condition is favorable, make a higher down payment to decrease the borrowed amount. This will reduce the total money repaid over the loan tenure and can result in significant savings.

  1. Online calculator

Before you decide on availing of a used car loan, use an online calculator to determine the approximate equated monthly installment (EMI). It is a quick and simple tool that allows you to calculate the EMI based on various parameters, such as loan amount, tenure, and used car loan rates. It will enable you to find a car that fits within your budget. So, you can make timely repayments without going through financial distress.

You may apply for a loan via the website of Mahindra Finance. Submit your basic information, upload the necessary documents, and provide details ofthe vehicle. The entire procedure from application to sanction of your used car loan is simple and gets completed within a few days.

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