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The first car of new drivers is mostly a second-hand one. People often prefer honing their driving skills on a used vehicle before buying a new car.
A common question when you plan on buying a used car is whether banks offer Loan for second hand vehicles. Many borrowers believe that only a car loan can be used to purchase a car. However, this is far from the truth. You can take a Personal Loan to buy a second hand car.
This, in fact, comes with a number of benefits. When you take a car loan, you need to list your vehicle as collateral with the lending institution. This essentially means that, if you default on your loan repayments, the bank has the right to take ownership of your four-wheeler.
On the other hand, an unsecured Personal Loan comes with a slightly higher interest rate, but you won’t have to submit a collateral. Therefore, the risk of your car ever being seized by the lender is zero. On top of that, banks are usually reluctant to give car loans for vehicles that are more than 4-5 years old and/or for car models that have been phased out.
A Personal Loan comes free of these criteria; as a borrower, you have the freedom to use the loan money in whatever way you see fit.
A look at Personal Loan Eligibility
Your Personal Details
Banks will ask you for your income details, your age, and your city of residence, when you apply for a loan online. You will also need to hand in documentation like your identity proof, employment proof, and salary slips. This is simply a measure to establish your credentials before they lend you the money.
Your Credit History
When you apply for a loan, your lender will take a look into your credit history.
A good credit scores tells them that you are a reliable borrower—someone who is financially stable, and who will repay the loan in time. However, a bad credit history can become an obstacle in getting a loan. Therefore, it is always better to improve your credit history by paying off pending loans and unpaid bills, before even applying for the loan.
How do you Apply for Personal Loan for Used Vehicle?
The application process is quite simple. Go on the bank’s website, fill up an application form, and submit it online. Most banks these days give you a loan approval within minutes. A bank representative will meet you to collect your documents. The loan will be sanctioned soon after that. You don’t have to step out of your house to get a Personal Loan for used car!
Different banks give different Personal Loan offers, interest rates and deals. Before applying for a loan, shop around a bit, compare the pros and cons, and then select the bank that gives you the best deal. Soon enough, you will be able to drive home the car you can’t wait to buy! You can get the know more about the ultimate face-off between car loans and personal loans.
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