Know How To Pick Between a Personal Loan and Used Car Loan

As more people look at owning used cars, the second-hand car market has witnessed an upswing in recent times. After all, used cars tend to be more affordable, there are usually plenty of options in almost all price ranges, and if you look hard enough, you may just find a deal that is too good to be true.

Now usually, if you are looking at owning a used car, you may be advised to take a used car loan. But the features of a used car loan are dependent on the state of the second-hand car that you want to purchase, and this may be restrictive. Plus, a used car loan comes with a defined loan amount and may need you to furnish a collateral.

However, when you apply for a Personal Loan for Used Cars from Bajaj Finserv, you get unrestricted access to a loan amount of Rs.25 lakh, which you can use for all expenses you incur at the time of purchase. Here’s why a quick personal loan may be a better fit to help you fulfil your dream of owning a quality used car: 

Interest Rate

Rates for used car loans range between 10% and 17%. With a Bajaj Finserv Personal Loan, you can avail financing at rates starting from 12.99%. Also, it’s important to know that the interest rate for a used car loan is linked to the condition of the car that you intend to buy.

Sanctioned Amount

When you take a used car loan, you normally get up to 70% to 90% of the second-hand car’s value. With personal loans there is no such limit and with Bajaj Finserv you get access to sum of Rs.25 lakh. You can use the bulk of it to purchase the car and the rest to refurbish its seats, install a music player or carry out other modifications.

Tenor of The Loan

For a used car loan the tenor is usually 5 years and the same applies to personal loans too. However, in the case of the former, the age of the second-hand car has a bearing on the tenor as well. So, if you buy a used car that is 4 years old and your lender requires repayment within 7 years of the first purchase, then the tenor would be 3 years only.

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Eligibility Criteria

To obtain either a used car loan or a personal loan, a good CIBIL score and a steady stream of income are a must. While personal loan criteria pertain to factors such as age, citizenship and employment, used car loan criteria involve the vehicle too. For instance, the vehicle may have to be below a particular age or possess certain documents for you to qualify.

What Are the Advantages of a Used Car Loan?

A used car loan gives you access to a lump sum amount that you can use to purchase the car quickly. Since the automobile serves as security, you have a chance of fetching a low rate and should you have a good CIBIL score, the prospects get even better. However, unlike a personal loan, a used car loan cannot be used for any purpose other than a car purchase, and you do not own the car until you repay the loan.

What Are the Advantages of a Personal Loan?

Personal loans may be slightly more expensive, but nonetheless, offer collateral-free financing.  Moreover, vehicle valuation is not a necessity and so, approval times are faster. In fact, with Bajaj Finserv you can obtain a quick Personal Loan approval, within 5 minutes of making an application online. Post verification, you also benefit from 24-hour disbursal.

Bajaj Finserv offers you a Flexi Loan facility, using which you can borrow multiple times from your sanction, without needing to make multiple applications. Additionally, interest is charged on the withdrawn amount only, and you can pay interest-only EMIs for the first few months of the tenor.

Now that you know the difference between a personal loan and a car loan, pick the option that suits your financial requirements best. If a feature-rich, quick personal loan is what you’re after, check your pre-approved offer from Bajaj Finserv. It gives you instant approval through a tailored deal, so you can get behind the wheel in no time at all!

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