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Car loans in India generally carry the following features:
One can opt for new or used car loan depending upon the need and the kind of car requirement. Though, most people prefer a car loan over new cars and not the second-hand ones.
Car loan option in India, for a majority, is an alternative that lets them purchase a car which is better than the one available in their budget since the car loan approval is quick.
Car loans in India generally provide a fixed rate of interest option while repayment through EMIs. This keeps you assured of a fixed repayable amount on a monthly basis towards the car loan, facilitating better budget planning without disturbing your usual expenses.
A bank offering car loan mostly also provide flexible repayment tenure options of 1-7 years to repay the car loan amount in regular EMIs.
Car loans in India are often easier to avail when compared to any other loans and involves easy documentation with clear instructions and guidance throughout the full car loan approval and sanction process.
Car loan borrowers can avail loans up to Rs. 1.5 cores, mostly comprising of 100% of the vehicle’s on-road price.
Most banks have reasonable EMIs within flexible tenure options to offer on Car loans.
Car Loan for a Used Car or a New One
Car loans are available for not just buying brand new cars but also used ones. On the face of it, a used car is cheaper so clearly, the car loan amount required will be lower, and so will be the car loan EMIs. But in most cases, a used car requires a higher upkeep cost and there might be additional re-registration costs associated with it, neither of which will be covered by the car loan. So, for a large majority of the prospective car purchasers, approaching a bank or NBFC for new car loan options is preferred over used car loan options. Another factor is that the car loan approval is much swifter for a new car.
But buying a pre-owned car is not that bad of an option either. We list down a few reasons why buying a pre-used car via a car loan is a good deal too:
First and foremost, it is immensely pocket friendly. It is obvious that a second-hand car will cost less, thereafter, the pre-owned car loan financing it will also be a lesser amount compared to its new-car alternative, meaning smaller monthly instalments to pay.
It is evident that the demand for second hand car loans is lesser that that for a new car loan. This is a reason that most banks feature used car finance as an important component in their products, thus, these products are customized and added with extra benefits to appear as customer friendly as possible. Therefore, a car loan gives lots of features and rebates but less of the hassle associated with buying a new car loan.
And the best part, in case of a pre-owned car, the choice of models isn’t dependent on its current on-road price. The amount you invest in a new car of a particular model can buy you a higher model in the same amount or probably even lesser in case of a second-hand car of the same make. Plus, the insurance cost of a pre-owned car is lesser and the prospect of depreciation is considerably less when compared to new cars. So, you can retain its original value when you intend to resell it in the future.
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