Do you want to bring a second-hand car home but don’t have enough funds? Availing of a used car loan financing can help you. But before you get a used car loan, knowing the advantages, as well as disadvantages, will surely help you make the right decision.
Advantages and Disadvantages of taking Used Car Loan
Buying a car is much more than just selecting a particular model and brand of the vehicle. You also need to consider the age of the vehicle to determine if it will serve your purpose. If you are thinking to buy a pre-owned car but don’t have enough funds to pay for the entire amount, then you can consider taking a loan for used car from renowned financial corporations like Muthoot Capital Services Limited. You can experience the happiness of owning your car when you avail of the best deal on a used car loan.
For better understanding, here are a few advantages and disadvantages of used car loans:
Advantages of Used Car Loan:
There are only a handful of documents required for obtaining second-hand car finance. Firstly, you’ll need to present at least one valid identity proof amongst the following – Aadhaar card, Passport, PAN card, voter ID card, or driving license. Secondly, you will have to provide a few documents to validate your address proof like electricity bill, telephone bill, gas connection bills, driving license, LIC policies, ration card, etc. Another prerequisite document is your income proof, wherein you’ll have to submit your Income Tax Return (ITR) or salary credit in a bank statement or payslip. Lastly, all that’s required is submitting a passport size photo of yours. Out of all the four categories of documents, Muthoot Capital Services Limited asks for any single document, and not all of them. Eventually, this makes the entire process of documentation hassle-free for the customer.
Getting quick access to the loan amount isn’t troublesome as most financial institutes or NBFCs disburse the loan amount to their customers in a short period. After verification and approval of all the submitted documents, the lending company officials will disburse your loan amount quickly, without much time.
Flexible repayment options:
A prominent reason that makes a person hesitate to apply for a loan is the substantial pressure of a confined repayment period. But, it’s not the same when it comes to applying for used car loans. Many lenders these days offer flexible repayment options, which can range from 1-5 years. And, eventually, it depends upon the customer’s choice to pick a convenient period that he/she thinks will be enough to repay the whole amount.
Nowadays, the lenders offer various special schemes to benefit their customers who avail of second-hand car finance. For example, a lender will provide you with a loan amount for the entire amount of the used car, along with an additional insurance scheme. However, these schemes are confined to some particular models as well as brands of the vehicle. You should enquire about the available programmes to know if there is some additional benefit that can be acquired from a specific lender.
Disadvantages of Used Car Loans:
Comparatively higher rate of interest:
There are three kinds of car loans that are available in the market today, i.e., loans against cars, new car loans, and used car loans. However, the biggest drawback when it comes to obtaining a used car loan is that most lenders charge a higher interest rate than new car loans and loans against cars. But, with Muthoot Capital Services Limited, you will not face such an issue as the company charges competitive interest rates on used car loans.
Absence of used car loan calculator:
A used car loan calculator is vital when it comes to making the customer understand the precise calculation regarding their EMIs. But, unfortunately, not many lenders offer such calculators on their website or mobile app to their customers. However, the same isn’t the case with Muthoot Capital Services Limited as the company gives you the option of using a free Used car loan emi calculator for making you aware of your repayment amounts.
Hence, now that you know some of the significant advantages and disadvantages of used car loans, you can very well assess the convenience and benefits of taking such a loan. Though there are pros and cons, availing of a used car loan is one of the most affordable and accessible ways to get your vehicle with trouble-free procedures, low rates of interest and quick approval.