Used Car Loans
Used car loans are among the most significant features of the present day loan industry. Getting a car has become much easier than before with lots of banks and institutions offering loans at competitive rates. Beside providing loans for the new car these banks also provides you loan for the second hand or the used car. There is a large segment of people, who go for the used car loans.
Benefits of Used Car Loans
It is not possible for all the people to go for the new car due to their financial constraints and other reasons. For such people who cannot go for a new car the used car loan is very helpful. Such loans help you to get a used car that falls within your budgets and limits. Such loans are also a perfect choice for people who change their car very frequently.
Pick the Right Institution
There are various banks and financial institutions that offer used car loans. One should carefully select the bank on the basis of various factors that are suitable to them. These factors include the loan amount, rate of interest, terms and conditions, tenure of loan, security for the loan and others.
Loan Amount and Rate of Interest
Generally the maximum loan amount that can be availed in used car loan is around 75 to 80 % of the total valuation of the used car. This loan sanctioned percentage is slightly less than what is available in new car loans. The rate of interest in used car loans are also bit higher than that of a new car loan. The interest rates in used car loans can be fixed or floating. In fixed the rate of interest remains same over the entire tenure of the loan whereas in floating the rate of interest varies according to the terms and conditions decided in the deed.
Security
The used car loans can be secured or unsecured. There is a need for collateral security in secured loan. Whereas in unsecured there is no collateral security against the loan amount. The rate of interest in secured loan is comparatively less than that of the unsecured loan.
Repayment
The repayment tenure of the used car loan is less than that of the new car loan. These used car loans need to be paid in much earlier time and thus it increases the burden of EMI that is to be paid.
Used car Loans have their own benefits as well as limitations that need to be considered before taking the loan.
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