How To Avail Best Car Loan For A Pre-Owned Car?
Getting a car is a dream for many individuals. You can either opt for a brand new car or even a second hand one, depending on your preference. However, when applying for auto finance for each of these different cars, there are certain things you must be aware of. Certain factors are taken into consideration when applying for these cars, especially for the preowned. In order to get the best car loans in India, you must consider these points.
Good Credit Score
A good credit score is needed in any loan application. This is no different for the auto finance loan. In order to get the highest principal amount, you must get the best score possible. However, when it comes to pre-owned cars there is a high possibility you will get a high interest rate and a low principal amount. This is due to the fact that pre owned cars are considered more risky as compared to new cars. Hence the rates will be higher. To get a good score, you must have good credit score.This is because this score will be a proof that you are not a high risk financial investment to the banks. A good credit score will increase your chances of getting the best car loans in India. If you do not have the score you require, you can take the necessary steps to improve it.Additionally, it will provide you with leverage that will ensure that you can even negotiate for a better offer.
Age Of Vehicle
Another factor that is taken into consideration is the age of the vehicle. The auto finance will be provided for any model of a new car. However, when it comes to the case of used cars, the age of manufacture plays an important role in the deciding factor for the loan. Most of the old cars are of a model that is not in production any more. In such cases, the loan will not be provided. Most banks and financial institutes will provide the best car loans in India when taking into consideration of the age of the car along with the tenure of the loan. Mostly the age of the car and tenure of the loan should not exceed a period of seven to ten years.
For certain types of loan, you will need to provide proof of adequate income. This is no different for the loan for a pre - owner car. As an employer or even a self-employee, you will need to have adequate funds to pay off the loan at the time of repayment. Most banks will have different rates of income requirements, but it should be over Rs. 10,000 annually. You can even have a joint income that is higher than the given value.