used car loan

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In: Blog | Complete Auto Loans

If one is planning to buy a pre-owned car or called a used car or a second-hand car, the person can opt for used car loans. A car loan can be determined as a loan secured by car which lets the customers paying off their car on the basis of monthly payments rather than paying them in cash. Those customers who willingly want to pay off their car over time can use a used car loan to buy or refinance a used car. The loan rates at reasonable interest allow the car buyers to save some amount of money over the life of their loan by charging them less interest for their used car loan. Best car loans have an easy application process, good financing options, and flexible repayment terms for the used car. 

When you need a car but when you don’t have enough cash to buy it, the thought of financing can be vital. There are so many options as to whether to take which loan for a used car. If one is on a tight budget, they may wonder how to get a used car loan. To make a monthly used car payment is a major commitment, but for some people, it’s the only option. Understanding how car loans work, there are different types of loans to look for in the market.

Following are some of the finance companies to apply for used car finance:

  • TIAA-CREF
  • United Services Automobile Association
  • Chubb
  • New York Life Insurance
  • Fidelity National Financial
  • Fannie Mae
  • Capital One Financial
  • Principal Financial Group

Eligibility Criteria to apply for Used Car Loan Online:

  • The minimum age criteria for loan application is 18 years.
  • The maximum age at the loan maturity time must be 60 years for salaried and 65 years for self-employed and businessmen.
  • Minimum net income criteria for applying for a car loan.
  • Employment type for applying for the loan
  • Residence essentials for applying for a used car loan.

Necessary Documents for applying for a Used Car Loan:

  • Proof of identity are required such as passport, driving license, etc.
  • Proof of address such as passport, residential proof, etc.
  • Documents resembling age proof.
  • Photographs of the used car loan applying candidate.
  • Documents of the used car for implementation of the loan process.
  • Income proof such as salary slips which may be of three months or six months through the bank statement or the latest tax returns.
  • Hypothecation gives the lender authority to seize the assets of the used car loan applier. This is removed by visiting the Regional Transport office along with the necessary documents such as the No objection certificate, car insurance papers and address proof.

Procedure to apply for Used Car Loan:

These are some of the following points for used car loan apply online:

  • Initially fill in the personal details, financial details, and other employment details about the person who wants to apply for the used car loan on the company website.
  • In the next step select the loan amount and process it accordingly so that a person can get an instant approval for a used car loan.
  • In the next step upload all the necessary documents required for the application process to apply for the used car loan online.
  • Fill in the money details about the used car loan so that the used car loan process would be completed.

The cost involved in loan:

The loan amount which a person can avail of usually depends on age and income. Depending on the net monthly salary or income amount varies from lender to lender. At present, the range is from 25-48 times of net monthly income or 4-6 times the yearly income. The lender levies some charges while applying for loan applications or on early loan closure. Processing fees are involved during the application process. It usually varies from 0.4 to 1% according to the loan amount. They charge some fees on early loan closure which is usually called as foreclosure charges, it basically depends on the outstanding loan amount. Presently it usually ranges from 5 to 6 %. Some banks do offer no foreclosure charges. Some of the lenders do offer what is called part payment. A bank usually charges at 3 to 6 % depending on the tenure left to the part payment facility. However, this is not available within the first six months.

Repayment of Loan:

Usually, lenders offer flexible repayment periods which range from about one to seven years. The repayment period can be chosen by the customer at his convenience. 

Conclusion:

While applying for a car loan one must take into consideration that it is easier and requires less documentation as compared to the other loans such as a home loan. There are no additional collaterals as in the case of the former. If the budget is not stretched, the loan itself is secured against the car.