Best Way To Finance a Used Car Loan

Highlight: Understand the requirements and the process to finance your dream car with instant car loans.

The automobile industry is rapidly evolving, and the prices of premium cars are steadily going up. Owing to the high cost of several car models, it becomes difficult for many to invest in them. You may have to settle for cars delivering a lower performance due to the expense involved. 

Opting to buy a used car in place of a new one can be the perfect approach in this situation. It allows you to drive the vehicle of your dreams without busting your wallet. A used car particularly makes sense for first-time car buyers. It is also an excellent choice if you are planning to buy a second set of wheels in the family. And the best way to finance it is through instant loans on used cars.

Multiple banks and non-banking financial companies, also known as NBFCs, offer loans on used cars. The terms, conditions and charges vary from one lender to another. You have the option to apply for personal loan online today without having to deal with the hassle of spending hours in person at a bank. 

Today, financing companies allow you to get loans without lengthy paperwork, which can be time-consuming when borrowing from a bank. However, before applying for a loan on a second-hand car, identify the perfect used car to invest in. Read to know how you can get a perfect second-hand car and get the ideal financing for it. 

Also Read: Should You Opt For Two Wheeler Loan?

How to buy a second-hand car?

The foremost and most crucial thing to do when investing in a second-hand car is to select an apt model. Consider which company and model you wish to buy, check the car’s performance, and decide whether you want an SUV or a compact car. Once you have decided on these factors, you can buy a used car through the following channels:

• Owner of the car: You can directly purchase a used for from the owner, thus, significantly lowering the cost by eliminating brokers and agents. However, this process can be tiresome and needs patience and time.
• Used car dealers: A neighbourhood dealer of used cars lets you inspect a variety of cars, all at the same place. While this offers convenience, buying used cars from deals will cost you more than buying directly from the owner.
• Online used car dealers: Like other e-commerce platforms, online used car retailers also offer you a wide choice. Choose reliable and trustworthy platforms for this purpose so you can benefit from quality checks and guarantees.
• Online classified websites: There are many websites that allow you to purchase second-hand products, from household items to vehicles, directly from owners. You can use these platforms to contact an owner directly. This may require some payment of commission, so beware of the terms. 
• OEM-owned used car dealers: Many Original Equipment Manufacturers (OEMs) own their brand’s used car dealership, which is one of the reliable places to purchase a used car. However, purchasing a car from an OEM dealership can cost you the most on this list.

Important factors to keep in mind when buying a used car

● Check the car: Thoroughly check the vehicle you desire. If you are unsure about how to do that, you can always seek the assistance of a mechanic. If there is any minor issue with the car, you may get the chance to negotiate its price. It is also a good idea to drive the vehicle in a low-traffic region and check for any vibrations.

● Go through the essential papers: It is imperative to inspect the vehicle’s registration certificate and insurance papers properly. In addition, check if the chassis number and engine number on the car match the ones mentioned in the documents.

● Vehicle history: It is crucial to check the history of the car before purchasing it. It will help you understand whether there is any service issue prevalent in the car or if it has been in an accident.

● Transfer the registration certificate: After purchasing the car, the Registration Certificate (RC) has to be transferred to your name. An NOC shall be needed if the vehicle is registered in a different state. An NOC is also required if the previous owner has purchased the car using a loan.

● Transfer the insurance: The insurance coverage of the car needs to be transferred to your name immediately.

● Service the car: While you may want to take your car out for a long drive immediately after the purchase, it will be wiser to get it serviced first. Get the car cleaned up the car change its fluids before using it for the first time.

Make sure you select the type and model that effectively meets your needs and fits your budget. Most lenders consider the type and age of the car model before providing a loan on a second-hand car. 

Hence, selecting a relatively newer model will increase your chances of acquiring the loan amount without any issues. After choosing your vehicle, you can always explore options for an instant car loan for used cars on the web.

Also Read: Short term loan vs long term loan

Important aspects of acquiring a car loan

● Sum up the cost of your car: After zeroing in on a model, you need to calculate what you can pay from your pocket and what you require as a loan. You can also apply for a small instant loan with a simple instalment scheme to pay the advance needed.

● Set your requirements: Select the monthly instalments and loan terms as you decide your loan amount. This will majorly depend on your monthly income and future calculations. If your loan sum is relatively high, it may be prudent to go for a loan on a second-hand car that has a long repayment period and involves attractive interest rates.

● Search for the available options: There are multiple government and private banks as well as online financial institutions that offer financing for a used car. Many of them even allow you to avail of instant loans on used cars online. They offer instant processing and simple paperwork. Such an approach makes getting a loan extremely easy. 

You can always explore and compare loan options and deals offered by reliable lenders online and choose which is best for your needs. Fibe is one of the best options available in the market for an Instant Loan for Cars. We have a simplified application process with simple loan eligibility and basic documentation. Avail an auto loan up to ₹5,00,000 from Fibe at affordable rates of interest and prepay at no added charge.

● Submit the documents after verification: Most lending institutions ask for proof relating to your income and identity. For instance, the basic documents required for a used car loan are an Aadhaar Card, Voter ID, Salary slips, Form 16, and bank statements whose copies you will need to submit to the lender. The exact documents needed may differ from one lender to another. Once you have submitted all the paperwork, you will become eligible to get the loan.

Before getting an instant loan online, it is wise to check your credit score as it can affect your EMI on second-hand car loans. If your credit score is low, it will be smarter to pay as much money as you can from your own pocket while buying the car. This will help you in keeping the borrowing amount to a minimum as a low score generally results in a higher rate of interest and a lower loan amount. 

This is not something you need to worry about with Fibe, as you can apply with a low or no credit score with us. Our alternate credit scoring model allows us to offer used car financing without relying on the traditional credit score. 

However, make sure you plan timely repayment of your instant car loan so that you can avoid late charges and penal interest. With all this information at hand, you can choose the right car and financing option. Be sure to consider the Fibe Instant Car Loan. To apply with ease download our Personal Loan App or register on our website. 

FAQs on the Best Way to Finance a Used Car

What is the maximum tenure for a used car loan?

The maximum tenure on loans for used cars can extend up to 84 months. Your EMIs on second-hand car loans will be low if you opt for the maximum loan tenure. However, this increases the total interest you pay. So, opt for the shortest tenure based on your affordability. 

How much loan can I get for my used car?

Depending on your eligibility and other factors, lenders normally offer 80% of the vehicle’s value when financing a used car. However, there are lenders from whom you can even get 100% financing for a second-hand car.

How old can a car be to get financing for it?

Usually, lenders finance cars as old as 10 years but not beyond this. In general, lenders prefer the car to not be more than 3 years old.

What is good about a used car loan?

Used car loans are generally convenient to apply for, as you can do so online. Moreover, the entire application process is quite simple and straightforward. In addition, you also get to enjoy lower rates as well as flexible repayment tenures with second-hand car loans.

What is the best way to finance a used car?

The best way to finance a used car is by availing of a second-hand car loan online.