Used Car Loan: Good Or Bad, Check Out!


BENGALURU: As the E-commerce has picked up its business in India, buying and selling of the used items have become a buzz, similarly buying used cars has become much easier than ever before relatively the used car loan is now in the business, ar reported by the Firstpost.

But is it worth applying for a loan for a used car? Well, here goes the detailed article that you must not miss.

Though, rate of interests is considered to be the burden, comparing interest rates put on the new car loans are lesser, since most of the banks offer 10.5 to 12.5 percent rate of interest. However, the rate of interest put on the used cars is whooping 10.5 to 16.5 percent and the highest rate of interest is more likely to happen.

Most of the banks in India can offer 90 percent loan of the ex-showroom price of the new car, but the case is different if you want to apply for the loan for a used car. The banks will offer only up to 70 to 85 percent value of the car, hence the used car buyer has to pay a higher percentage of down payment compared to the new car buyer.

Loan tenor, the average tenor offered by the banks to loan appliers for the new car buyers is three to five years and in rare cases some banks offer seven years too. Conversely, three years is the average tenor offered to the used car buyers, five year tenor is a rare consequence to happen.    

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