Benefits of Taking a Pre-owned Car Loan from an NBFC
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Nowadays, owning a car is more of a necessity than a luxury. However, buying a brand-new car can be a significant financial commitment. This is where the market for pre-owned or used cars comes into play, offering a more affordable alternative to new vehicles. If you are in need offinancial assistance to purchase a pre-owned car, used car loans are an excellent solution. These loans are available from various financial institutions, including Non-Banking Financial Companies (NBFCs), which have become a popular choice for many consumers. In this article, we will explore the benefits of taking a used car loan from an NBFC, and why it might be the best option for you. Read on!
Benefits of Availing a Used Car Loan from NBFCs
Taking a used car loan from an NBFC offers the following advantages:
1. Flexible Eligibility Criteria
One of the most significant advantages of opting for a Pre-owned Car Loan from an NBFC is the flexibility in eligibility criteria. Unlike traditional banks, which often have stringent requirements, NBFCs are more accommodating when assessing your creditworthiness. They consider various factors, such as your income, employment history, and even the value of the car you wish to purchase.
2. Quick Loan Processing
NBFCs are known for their efficient and speedy loan processing. This quick turnaround time is particularly beneficial for those who need to purchase a car urgently or want to take advantage of a good deal in the used car market. With minimal documentation and a streamlined process, you can get your loan approved and disbursed in a matter of hours.
3. Higher Loan-to-Value Ratio
The Loan-to-Value (LTV) ratio is the percentage of the car’s value that the lender is willing to finance. NBFCs generally offer a higher LTV ratio, which means you can get a larger loan amount relative to the car’s value. This is especially advantageous when purchasing a used car, as it reduces the amount you need to pay upfront. A higher LTV ratio also allows you to afford a better-quality vehicle without stretching your budget.
4. Customized Loan Solutions
NBFCs are more likely to offer customized loan solutions tailored to your specific needs. Whether you require a longer loan tenure, flexible repayment options, or lower EMIs (Equated Monthly Installments), NBFCs are more willing to accommodate your preferences. This level of customisation can make it easier to manage your finances and repay the loan without straining your budget.
5. Competitive Interest Rates
While it is commonly believed that NBFCs charge higher interest rates than banks, this is not always the case. Many NBFCs offer competitive interest rates on used car loans, especially when compared to personal loans or other unsecured forms of credit. Additionally, NBFCs often have promotional offers and discounts that can further reduce the interest burden on borrowers.
6. Minimal Documentation
One of the hassles of applying for a loan is the paperwork involved. NBFCs simplify this process by requiring minimal documentation. Basic documents such as proof of identity, address, income, and the car’s details are usually sufficient to process your loan application. This not only speeds up the approval process but also reduces the stress associated with gathering and submitting numerous documents.
7. Pre-Owned Car Loan Availability
NBFCs are more open to financing older models of cars than traditional banks. If you're looking to purchase a car that's more than five years old, an NBFC might be your best bet for securing a loan. Banks often have restrictions on the age and type of vehicles they finance, making NBFCs a more flexible option for purchasing a wider range of used cars.
To Conclude
Taking a Used Car Loan from an NBFC can offer numerous benefits, from flexible eligibility criteria and quick processing times to customized loan solutions and competitive interest rates. NBFCs have positioned themselves as a reliable and customer-friendly option for financing pre-owned vehicles, particularly for individuals who may not meet the stringent requirements of traditional banks. Whether you're looking to upgrade your car or get a top-up on your existing used car loan, considering a used car loan from an NBFC could be a smart financial move. By choosing the right lender and loan product, you can enjoy the benefits of driving a reliable car without the financial strain of a large upfront payment.
Disclaimer: No Business Standard Journalist was involved in creation of this content
Topics : Car loan business
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First Published: Aug 27 2024 | 5:43 PM IST
