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5 Mistakes to Avoid When Choosing a Used Car Loan

By Finserv MARKETS - Aug 8,2019
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Used Car Loan to buy Second hand car

Today, everyone wants to buy a car. Not only it defines your social status but has, in fact, become a necessity. Most people tend to opt for purchasing a new car; whereas quite a few people buy a used car.

With the option of purchasing a used car, you can now buy your dream car without draining your savings.

Moreover, most financial institutes are offering second-hand car finance services. Are you looking for a used car loan? However, before you avail a used car loan, there are certain things to keep in mind when choosing a used car loan.

Following are a few mistakes to avoid while taking a used car loan.

1: Borrowing more than you can afford

One of the most important aspects to remember when taking a used car loan is your budget. Most people tend to borrow more money than they can afford. This further makes it difficult for you to repay the loan amount on time. Hence, before you avail a used car loan, calculate the down payment amount you can afford and how much amount you need to take as a loan.

2: Not tracking your credit score

It is highly advisable to check your credit score before you take a used car loan. A good credit score depicts that you are financially stable to repay the loan amount on time. Moreover, with a good credit score, you get to avail a lower rate of interest and can attract some great offers on your loan scheme.

3: Not keeping your options open

Most people immediately accept the very first loan offer they come across. You need to remember that different lenders offer different interest rates. Moreover, the higher your rate of interest is, the higher the amount you have to repay.

Hence, it is recommended that you do market research before finalizing on a loan offer. Take other aspects like loan tenure, eligibility criteria, required documents, and repayment options, into consideration when taking a used car loan.

4: Not reading the terms and conditions

People usually sign off the loan papers without reading the fine prints. It is imperative that you go through the terms and conditions of the specified loan tenure. Check whether or not the rate of interest that you agreed on with your lender is mentioned on papers. Also, look for other hidden charges such as prepayment fees, late payment fees, and foreclosure fees.

5: Choosing several add-on services

Many lenders offer different add-on services like alloy wheels, sunroof, extended warranty, display options and much more. You can choose to customize your car as you like but there are certain add-on services that you may not require.

It is, however, noteworthy that these add-on services come at an extra cost and the amount is added to the total cost of your vehicle.

Hence, you should analyze these add-on services and choose the ones that you require the most.

The Bottom Line

By avoiding the aforementioned mistakes, you can avail a great deal on your used car loan. With Bajaj Finserv Used Car Loan from Finserv MARKETS, you can benefit from features like easy EMIs, free car fitness report, end-to-end car care services and much more. Moreover, the loan application is approved almost instantly and your car dealer will receive the money within 48 hours.

What else do you want? Apply for Bajaj Finserv Used Car Loan with us, today!

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522