Having a car of your own is probably one of the best experiences you will ever have. It is still a dream come true experience for many people because of high financial requirements. However, getting a car, be it second-hand, is difficult without any financial assistance. In such cases, people go to apply for loans to help them accomplish their needs. Since buying a second-hand car is a personal requirement, you can go for a personal loan.
A personal loan can help you cover all your personal needs without putting much financial burden on your monthly budget. It is one of the most popular loan options that can touch upon a variety of subjects like buying a car, or a house, funding higher education, making a down payment, or even financing a wedding. Personal loans are also easy to apply for and can be quickly sanctioned to borrowers.
Do you want to buy a secondhand car using a personal loan amount? Then Read on to answer all your queries related to personal loans. This will help you know about personal loans, their eligibility, papers, and the process to get a second-hand car.
Personal loan: What is the meaning of a personal loan?
A personal loan is a financial aid that you get from a lender to meet your financial requirements. The lender can be a conventional source like a Bank or an NBFC or even a private financier. You will be charged with a rate of interest which you have to repay within a tenure. You don’t have to pay the total amount of the loan upfront or make any down payment. You will only be required to repay the debt through the EMI.
Since personal loans are unsecured, you don’t require an asset like a property or shares to pledge to get a loan amount. You can apply for it and get sanctioned even if you do not have collateral. The loan amount is often high so that you can easily cover your needs and still not experience any financial burden. There is high flexibility in terms and conditions to help you have the liberty to choose the best for yourself according to your goals and requirements.
Now that you have known the meaning and significance of going for a personal loan, it is time to know about some of its features.
What are some of the exclusive features of a personal loan to buy a second-hand car?
There are several features of a personal loan which make it stand out from all other types of loans.
- Rate of interest
Even if a personal loan is an unsecured form of loan, you still are charged a higher rate of interest, provided that you are creditworthy to the lender. Banks and NBFCs charge an interest rate of about 10.45 per cent per annum to 24 per cent per annum on personal loans in India. The interest rates solely depend on your credibility, credit score, and financial muscle to repay the loan.
The disbursal period on most personal loans is often within a day to ensure that the borrower doesn’t face any delay.
The documentation requirement is also minimal to avoid unnecessary paperwork and prevent any type of delays just asked to show some basic documents like your KYC details, income proof, etc.
- Loan amount
The loan amount sanctioned on most personal loans is also high, ensuring that the borrower gets to accomplish the requirement. The loan amount ranges between Rs. 20 lakhs to Rs. 30 lakhs and sometimes, can even go up, as high as Rs. 40 lakhs.
Tenure is another factor which is very important when choosing a personal loan. The tenure of repayment on most of these loans ranges between 12 months to 60 months and in some cases even goes up to 84 months. This gives you the liberty to choose the best for you and plan your finances accordingly.
Eligibility to buy a secondhand car using a personal loan.
The eligibility criteria to get a personal loan to buy a second-hand car are easy and basic.
- You need to belong to the age group of 21-60 years to get a loan for a second-hand car.
- You must be either a salaried individual or a self-employed person, holding a work experience of about 1 to 3 years.
- You should have a decent credit score to get a personal loan for a second-hand car, usually 750 or more.
In addition, you need to show some documents like your Photo ID, signed application form with 3 passport-sized photographs, residential proof, and income proof.
How to get a personal loan to go for a second-hand car?
Most people buy a pre-owned car for two reasons, either to learn to drive or if they are experiencing any financial burden. In both these cases, you can go for a personal loan to have a second-hand car at a decent interest rate.
Before you apply for a personal loan to buy a secondhand car, you should at least have a decent credit score (750 or more), and a stable income. You should be able to arrange all the required documents beforehand and understand the mechanism of financing at a dealer to get a better offer.
Moreover, you should try to make a down payment, as much as you can, to avoid higher interest rates on finance.
Wrapping it Up
A second-hand car is the best choice for you if you are going through financial troubles or you want to learn how to drive. In both these, cases, you need financial aid that is going to help you have a second-hand car. So here, a personal loan comes to your rescue which you can get at a lower interest rate. But, before applying for it, you should make sure that your credit score is up to the mark, you qualify for the eligibility criteria, and you are capable enough to make a down payment. If you want to know more about personal loans and want to apply for them, you should visit Piramal Finance.