A lot of times, people don’t want to invest in a new car but get a pre-used car at a great price. It is during times like these that you need to ask your lender to give you a loan on a car already owned and used by someone in the past. You might think that car loan EMI for such purchases is lesser but that might not be the case.
Read on to know everything that you should that will influence you to get a loan for a pre-used car and how you can be well-prepared to apply for it.
What’s my credit score?: - To get a car loan EMI at a good rate, it is essential that you have a good credit score. A credit score is nothing but a past history of the repayment of your loans, credit card bills, etc. If you have not faltered much and paid all your bills on time, your CIBIL score will easily be above 750. That is a good number to get a car loan easily. If not, you might face problems getting loan approval.
Understand the valuation of the car you want to purchase: - Since you have set sights on a pre-used car, you should make sure you know its market value well before making the purchase. To perfectly gauge this, you should know about the kilometers traveled, vehicle modifications done to it, commercial or personal usage, etc. These factors determine the cost at which the pre-used car should be sold, which in turn would decide the rate of interest on your car loan EMI.
Know your loan details: - You should be absolutely clear of the breakup of your loan and what you’re being charged for. Loan tenure plays a very important role, especially when it comes to repayment. Usually, the tenure varies between 3 to 5 years but in some cases can also go up to 7 years. The rate of interest is another pivotal factor to consider. You should always aim at associating with lenders who will give you lesser ROI. Also, if you make a higher down payment, you will have to pay a lower rate of interest considering the loan tenure will reduce drastically.
Research and compare loan lenders: - You must consider multiple lenders when applying for a loan. Different banks or individual lenders offer different rates of interest, car loan EMI amount, etc. You should be specifically careful about this choice when purchasing a pre-used car because there is a third party involved- usually an individual who had to be paid for the car purchase.
Documents for personal loan when purchasing pre-used cars
The documents needed for a pre-used car loan are different from the ones needed for a loan taken for a new car. Here’s a list:
- Registration Certificate (RC): A very crucial document when getting a pre-used car is the RC. It contains all the essential car details such as the Chassis number, date of car purchase, engine number, etc. Make sure it is transferred to you in time when making a used car purchase.
- PUC (Pollution under control certificate): Whichever car you choose, you need to make sure that you have this document for personal loan in place. One of the largest challan amounts on the Indian roads, if you don’t have a PUC or an expired one, you can get into a lot of trouble.
- No objection certificate (NOC): This is possibly the most important document to have while purchasing a pre-used car. As a document for personal loan, you need to produce a NOC from the seller to make sure they have no objection to letting the sale come through.
With some research, you can land yourself a good lender who provides you a good rate of interest on your loan. Keep these factors in mind when purchasing a pre-used car.