Best Loan Deals For Used Car

Used Car Best Loan Deals

A brand new car is still a luxury item for many. However, most people need a car for driving after tedious work, dropping children to school and for running errands. For those who cannot afford a new car, there is the option of buying a used car. But even a used car does not come cheap and the buyer might have to take a loan. So he will have to look for the best loan deals for used car.

How To Find The Best Loan Deals For Used Car

Studying The Various Options

Used Car Dealer Financing

There are various used car dealers from whom buyers can purchase used cars. These dealers also provide attractive financing options that can be used by the buyer.

Commercial Banks

Banks also offer used car loans at low rates.

Pass Book Loans

When the loan applicant has a savings account with the bank, the bank grants a used car loan where the savings are used as collateral. Since this is a secured loan, one can get the loan on very reasonable terms.

Loans Against Life Insurance Policy

A person who holds a life insurance policy can get a used car loan by offering the policy as collateral.

Online Loans

There are various online lenders who will grant loans for used cars. Car buyers can get the best loan deals for used car from these lenders.

Loan Comparison

Comparing loans helps the borrower to find the best loan deals for used car. There are various web sites which are connected to a panel of lenders. These sites display comparison tables showing the terms of each loan. A loan may look like a best deal but there might be hidden charges like loan approval fees and so on. So, before deciding on which loan to take, the borrower should clarify such matters with the lender.

High Credit Score For Best Loan Deals

Independent credit rating agencies assign credit scores to individuals based on their credit history that is, their credit card payments, mortgage payments, loan payments as well as utility bill payments. The higher the credit score, the better are the chances for a good loan deal. This is because lending to a person with a good credit score does not pose much a risk to the lender.

General Features of a Used Car Loan

  • One can borrow up to 80% of the car value
  • For a salaried person, the loan limit is three times his annual salary. For others it is six times their annual income.
  • The repayment period can be anywhere between one and five years.
  • At the time of loan maturity, the used car should not be more than 10 years old.