Buying a car does not mean you will pick the one you like and pay for it and get it done with. It is a lot more complicated process than it seems since almost everyone buys a car on loan. It would help if you also decided whether you are going to buy a new car or a used car. Choosing a used car is going to make a massive difference in your finances. It would help if you also found out whether you are eligible for financing a car loan or not.
If you are going to take a loan for a used car, you need to know that the banks grant loans for a used car, which is not more than five years old. The interest rate in used car loans is generally slightly higher than the loan for a new car. There are a lot of misconceptions regarding a used car loan in the minds of the people. In this article, we are going to discuss five things people are wrong about used car loans.
Benefits of a Used Car Loan
The following are the benefits of applying for a used car loan:
- You still get a high amount of loan on a used car that would have cost you several times high if it were a new car. The EMI you pay would be lower for a car that would have been much higher if it was new.
- If the car you bought is used for business purposes, you still get some tax exemption if the car is new or used.
- In a used car loan, most of the work done is online, so the paperwork required is minimum, and it is hassle-free.
- The cost of insurance on buying a used car will reduce for the borrower.
Five things people get wrong about used car loans-
- Easy availability-:
Many people think that the demand for second-hand cars is less, but that’s not the truth. After the pandemic, many people have availed of second-hand car loans because they are less costly. A study has shown that in the year 2020, the demand for used cars has increased rapidly.
- Used car loans may be costly-:
Many people may not know that while buying used cars is a lot less expensive, getting them financed may be costly. That is because the resale value of the car is less. There are measures provided by different companies like Muthoot Fincorp, which provide muthoot gold loan and finance used cars and is a trusted brand for auto loans.
- You can fund the entire value-:
If a lender denies giving a loan or gives on very high interest, many people don’t know that there are alternatives that can be availed. For example- you can take top-up loans on an ongoing home loan because the interest rates are far cheaper. You can also fund the entire value.
- A personal loan is much better-:
You may be surprised to know that personal loans have far less cheap than the used car loans. If, in any case, you are not able to avail of a used car loan, you can always go for a personal loan.
- Tied- up lenders-:
Many platforms deal with pre-owned vehicles, which also have ties with some lenders. These lenders can get you used car loans at very low-interest rates. Also, public banks provide used car loans at much lesser interest than a private bank.
CONCLUSION
As opposed to the notion, used car loans are not as expensive as people think it is. Buying a used car is a good option when you are lacking funds but want a car anyway. It is also wise to save a lot of finances. While going for a used car loan, you should always opt for an excellent financial company that gives used car loan for a longer duration and the amount you want. Muthoot FinCorp is specialized in providing auto finance and provides hassle-free documentation and quick loan assistance.
Apply online at Muthoot Fincorp and avail exciting discounts on auto loans.
