Be Careful About Pre-approved Car Loan Myths

Used car loans provide the necessary funding to bring home a pre-owned car. These loans come with affordable interest rates, flexible repayment tenures, and hassle-free procedures. However, despite these advantages, pre-owned car finance is surrounded by myths.

Understanding these myths is essential before applying for a pre-owned car loan online, as it will give you a clearer vision. This blog will discuss the pre-owned car loan meaning while debunking the top 8 myths about pre-owned car finance rates and other terms.

Myth 1 – Car Loans can only be taken for a New Car

One of the greatest myths associated with car loans is that you need to buy a new car. If you wish to go for a minimally used car, you can simply apply for a pre-used car loan and get the model. All you need to do is check the manufacturing year before choosing a car. Going for a used car will not strain your pockets and keep you from paying high EMIs. You can look for cars that are barely used and buy them to satisfy your requirements.

Myth 2 – Car Dealers Offer the Lowest Interest Rates

It’s important to understand that car dealers are not financing providers, so you can’t expect them to offer lower interest rates. Muthoot Capital offers the best pre-owned car loan interest rates, ensuring you can manage your EMIs without compromising other commitments. Car dealers may try to steer you toward new cars, often charging higher interest rates. To make the right choice, evaluate your financial situation and opt for pre-owned car finance that aligns with your budget.

Myth 3 – Applying for Pre-Owned Car Finance is Unmanageable

Today, everything has transitioned to digital platforms, making processes seamless and efficient. From document submission to loan disbursal, applying for a Used Car Loan is now hassle-free and online. You can complete the application form for a pre-used car loan and upload your documents for verification effortlessly. You can use a Used Car Loan Calculator to estimate your EMI, ensuring you’re financially prepared. With Muthoot Capital, the process involves minimal documentation and rarely requires a branch visit, making it convenient and stress-free.

Myth 4 – A Car Loan Covers 100% Finance

You must be thinking that a Used Car Loan might cover the 100% charges of your dream car, but this is not true. The loan disbursed is not 100% of your car amount. The amount of car finance depends on the model of the car and the year of manufacturing. You must make some down payment while you buy the second-hand car to get the best pre-owned car finance rates and a comfortable EMI plan. However, Muthoot Capital can offer up to 100% of the IDV or Insured Declared Value as a Used Car Loan.

Myth 5 – Strict Eligibility Criteria for Car Loan

Besides flexible tenure and competitive pre-owned car interest rates, you also get flexible eligibility criteria. Muthoot Capital has easy-to-meet eligibility criteria, making it simpler to avail of a Used Car Loan. Whether you are a salaried individual, self-employed professional, or agriculturist, you can apply for the loan if you meet the simple requirements. Applicants must be between 21 years of age (at the time of application) and 65 years (by the end of the loan tenure). Additionally, a minimum monthly income of Rs. 15,000 or an annual net profit of Rs. 1.5 lakh is required, ensuring accessibility to a wide range of borrowers

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Myth 6 – You Can’t Get a Car Loan If You Don’t Have a Good Credit Score

A common myth is that only individuals with excellent credit scores can secure a pre-owned car loan. While a good credit score can lead to more favourable terms, it’s not a strict requirement. Muthoot Capital offers pre-owned car loans with flexible eligibility criteria, accommodating individuals with varying credit scores. Even if your credit score is less than ideal, you can still qualify for a loan, although the pre-owned car loan interest rates might be slightly higher.

Myth 7 – Lenders Only Cater to Urban Areas

Many believe that only urban residents can avail of pre-owned car loans, thinking that lenders target only metropolitan areas. In reality, NBFCs like Muthoot Capital cater to customers across rural, semi-urban, and urban regions. As long as you meet the eligibility criteria, you can apply for a pre-owned car loan regardless of your location. Digital platforms and online services further make it easy for individuals from smaller towns and rural areas to apply for Used Car Loans.

Myth 8 – NBFCs Have Rigid Rules & Eligibility Criteria for Car Loans

Another myth surrounding Used Car Loans is that NBFCs impose stricter rules than traditional lenders. In reality, NBFCs often provide greater flexibility and are more accommodating to borrowers who may not meet the rigid requirements set by traditional banks. For example: Muthoot Capital offers flexible loan options with minimal documentation, simpler eligibility criteria, and competitive pre-owned car finance rates.

These were the top 8 myths you should be aware of before selecting a lender for a pre-owned car loan. You can use the pre-owned car loan calculator to estimate your EMI online, eliminating complex calculations.

Muthoot Capital can offer Used Car Loans of up to 100% of the Insured Declared Value (IDV), with amounts ranging from Rs. 50,000 to 35 Lakh. Flexible repayment tenures between 12 and 60 months make it easier to plan your finances. Apply now!

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FAQs

What is a pre-owned car loan? 

A pre-owned car loan is a financial product that helps individuals purchase a second-hand or used car.

What are the current pre-owned car loan interest rates? 

The pre-owned car interest rates vary based on the lender, loan amount, and your credit profile. At Muthoot Capital, the pre-owned car loan rates start from 13% per annum.

How much loan can I get for a pre-owned car?

The loan amount you can get depends on the car’s model and manufacturing year. Muthoot Capital can offer Used Car Loans of up to 100% of the Insured Declared Value (IDV).

What is the eligibility for a pre-owned car loan? 

The basic eligibility criteria for a pre-owned car loan are an age between 21 and 65 years, a minimum income of Rs 15,000 per month, and minimal documentation like identity, income, and residence proof.

Can I get a pre-owned car loan without income proof? 

Yes, Muthoot Capital offers pre-owned car loans without income proof or based on assets, making it easier for people without formal income documentation to avail of the loan.

How long does it take to process a pre-owned car loan? 

The loan approval process can take as little as a few hours to a couple of days, depending on the lender and the completeness of your application.

Can I use a pre-owned car loan to buy any used car? 

Yes, as long as the car meets the eligibility criteria, you can use a pre-owned car loan to purchase the car of your choice.

What is the meaning of pre-owned car loan rates? 

Pre-owned car loan rates refer to the interest rates charged by lenders when financing a second-hand car purchase. These rates can vary depending on the lender, car model, and your credit score.

Can I apply for a pre-owned car loan online? 

Yes, applying for a pre-owned car loan is easy and can be done online. You can submit your application, upload necessary documents, and check EMI options through digital platforms.

What documents are required for a pre-owned car loan? 

The pre-owned car finance documents typically include identity proof (Aadhaar, PAN), residence proof, income proof (bank statement or salary slip), and passport-size photographs.