Used car financing has gained significant popularity in recent times due to various borrower-friendly features it brings along. It is easier than ever to avail used car loans today, with simple application and documentation processes. The increasing popularity of these loans has also been due to the rising interests of prospective car owners towards used cars, which are today available in a wide range of makes and models.
Further, another reason why people go for used cars is their affordable cost. Many used cars today are available in next to new condition and come at significantly lower costs than their new counterparts. This helps individuals save significantly on car purchase without compromising on their desired car model purchase, all of it ensuring vehicle ownership for them. Given that the used car loans only compliment such purchases, an individual planning to purchase a second hand car can look out for available loan options to go for. One good way to start for your suitable loan lookout is to know the best available features on these loans in the market.
Popular Second Hand Car Loan Features You Should Check Out
1. High LTV
As secured advances, financing value under second hand car loans is based on the LTV or Loan to Value ratio offered by the lending institution. LTV is a percentage representation of the maximum financing value a lender can extend as against the market price of the asset being collateralised. Irrespective of the maximum loan limit extended in general, your loan availability is subjected to LTV based on your asset’s value.
While used car loans are known to attract low LTVs due to their previous usage and reduced lifespan, some of the best lenders breach this mark and extend high LTVs. Up to 90%. Thus, when availing the advance, it can be wise to loo out for such lending institutions.
2. Significant loan value
Even though the overall risk of lending is high for financial institutions in the case of second hand car loans, they do not shy away from extending high-value funding. The financing quantum is thus suitably available to purchase your desired vehicle model, which can otherwise be a constraint if purchasing high-end used car models. With the best lenders, the loan quantum can easily go up to Rs.50 Lakh.
3. Flexible repayment tenure
Along with high-value financing, used car loans come with flexible tenures for repayment as well. Usually, the tenures are long and can extend up to 5 years easily to enable convenient repayment for borrowers. When selecting a loan tenure, you may use an EMI calculator and decide based on best affordability option.
4. Easy online application
Accessibility to second hand car loans has been enhanced too with easy loan application online. You can simply access your lender website and fill up the used car loan application form for submission digitally, all of it from the comfort of your home. Completing such application also takes minimal time, keeping the process hassle-free.
5. Minimal documentation
When availing used car loans, applicants are required to submit only a handful of essential documents for paperwork completion. Primarily, these documents include proofs of identity and address, along with income proof and any other additional document the lender might require.
6. Financing for all used car makes and models
One interesting aspect about second hand car loans is that these advances are available for all types of vehicle makes and models. Lenders extend financing irrespective of any restriction on the type of used car you need to purchase, thus allowing you all the flexibility within your financial affordability to choose the used car model you like.
7. Affordable funding
Initially, when financing for second hand car purchase was introduced, it attracted higher rates due to the increased risks associated with these vehicles. However, with growing trend of used car purchase, an evolving used car market, and buyer reliability, lenders now confidently extend financing at reduced used car interest rates. An individual can further leverage their financial stability to secured better rates on the loan.
8. Fast approval and disbursal
Given that the loan application has been simplified through online processes, several redundant steps have been done away with. It has led to reduced application as well as loan processing time, allowing for quick approval of the advance within a few minutes of application only for eligible candidates. Once you have secured approval, disbursal of the loan amount takes a short while as well, usually under the next 1 to 2 working days.
When applying for used car loans, individuals must ensure to check documentation requirements and collect all previous vehicle related documents, which can be crucial for loan approval. Also, when seeking such financing, it is wise to choose a car that is not older than 3 years and ensure all its components are up and in running condition to avoid unfortunate future pitfalls and get the best value for such purchase.