Ahmedabad is a metro city, and lots of luxury cars can be seen on the city roads. A person working and earning a reasonable amount can avail a personal loan from any known bank or NBFCs, but keep in mind financing a used car can be more expensive than getting a loan in Ahmedabad for the new car. And many dealers ask you to pay at least 50% of the value of the car and rest can be financed.
As soon as you drive a new car out of the showroom, the value of the car immediately drops heavily; this fall is called a depreciation loss. But in the case of a used car, the loss is already taken by the first owner. Now you need to decide whether you want to buy that car, that is 1 year old or 5 years old, the value difference won’t be much.
The first thing you need to know is to get a garage mechanic or a pre-owned car dealer who can help you analyze your car and let you know if any major defaults can be found.
The process of getting a used car loan is not so difficult from that of getting a car loan, but the cost incurred to get a loan for a used car can be more, in terms of rate of interest. As normally this loan is technically a personal loan, but you end up buying a used car. If in case you directly approach a bank in order to get a personal loan in Ahmedabad for a used car, you might get a high rate of interest, or you can also let your bank know that you are buying a used car, and they might help you with a low rate of interest. Also, you have an option to go to these pre-owned shops that help you with the lowest rate of interest possible.
If you having trouble to get a loan from a lender directly, you can approach these car dealers who have contacts with all these banks, but the rate of interest can be high, and you might end up paying a high processing fee also.
If you get a personal loan for a used car, it is advisable to make our credit score better. If your credit score is low and you cannot be offered a loan than wait till you make your credit score high so that you can get a personal loan at a lower rate of interest.
Documentation Required for the Personal Loan to Buy a Used Car:
Normally the documents are the same as when you apply for any personal loan. The list mentioned will only give you an idea what all documents you need to keep in mind in order to get a loan:
- Complete application Form with on passport size photograph
- Proof of Identity (PI)(any of the following)
- Proof of Present Residential Address
- Proof of age
- Financial/Income documents required for resident Indian
Buying a car is a need in India and buying a luxury car is not a big deal as major all car manufacturers have dug their feet in the Indian market. To get a loan for a new luxury car is, even more, easier now if you earn a reasonable amount to afford its EMI and maintenance. A luxury car will be available to you after few considerations such as.
- Interest rate plays an important role in deciding the value of the EMI you will be paying. A small change in the rate of interest will lead to a significant increase on the EMI. Hence compare the rate of interest before finalizing the deal of your loan
- The processing fee is a fee charged to you when you avail a personal loan or a car loan. Some lenders have a fixed processing fee, and some can vary on the basis of the cost of your car, but many lenders also offer INR 0.00 processing fee if you avail a car loan.
- Note that if you like to settle your loan in one go amount, you will be charged a penalty or fee in order to close the loan account.
- Loan tenure ranges from 1 to 7 years. If your loan tenure is longer, there is more of interest paid to the bank, so try to get a loan on as less a tenure as possible to clear your loan with less interest involved.
- Down payment: To avail a car loan you need to pay a deposit, that is, some percentage of the car value needs to be paid by the borrower to the car company. Further to this, the finance company will pay the rest of the amount.
- A car loan will have tax deduction benefits but the personal loan will not have these and also will have a higher rate of interest than a personal loan.
Therefore do a lot of research while getting a loan, in terms of, which loan will benefit you and why it suits your needs, but it advisable that you know more about both types of loans before you finalize one.