With access to competitive car loans and ready to dispose income, more and more people opt for a car upgrade. Unlike previous generations, no one wants to keep an old car version when they can easily afford to buy a new one. Also, the reliability of the cars has decreased over the years. This trend brings forth a huge number of used cars in the market and more and more financial lenders are tapping on the second hand car market to offer low-income groups a chance to own a car.

Getting the finance for a pre-used car is no longer a time consuming process. More and more banks have made it possible to get faster loan approval and minimal documentation in used car loans too. A few years ago, banks and financial institutions only offered pre-used car loan if the used car title had been transferred to the borrower’s name. This system has changed and the process is much more flexible than before. Most used car loan require no advance EMI payment and also offer additional services such as optional life insurance coverage. Security or collateral is also not required, as the used car automatically becomes the security just like any other car loan.

If you are looking for a pre-used car loan, here are some important terms and conditions that you must be familiar with before you commit to any loan offer:

➤ You can get the car loan approved for as high as 90% of the pre-used car value and you need to take care of the remaining 10% of the total car value. This 10% is the down payment that you need to pay.

➤ Pre-used car loans are generally approved for vehicles not more than five years old.

➤ Check your pre-used car loan eligibility to ensure that you are eligible for the loan before you start your application process.

➤ The document process for pre-used car loans remains the same as any other loan. You need to submit relevant documents such as proof of identity, proof of address, proof of age, proof of income, signature verification proof, photographs and bank statements.

➤ As the car depreciation for pre-used cars is more than a brand new one, the risk involved is much higher. Which is why pre-used car loans cost much more than a new car loan.

➤ Most banks and independent financial institutions have direct tie-ups with many authorized second hand car dealers. Check for the different fees and penalties, if any, before signing the loan agreement.

➤ Old cars will have a shorter loan term as the risk is higher.

Letzbank provides used car loans from some leading banks and financial institutions. If you apply for a used car loan directly at Letzbank, you will automatically be eligible for the service charge waiver, which is applicable on all online submissions at Letzbank.

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