Be Careful About Pre-approved Car Loan Myths

Last Modified: 8-December-2022

Used car loans provide individuals with enough funding to bring home a pre-owned car. Achieving such a dream becomes easy with low-interest rates, flexible tenures, and hassle-free procedures offered by used car loans.

Despite so many advantages, second-hand car finance is prone to myths. You must know about these myths before applying for a used car loan online to have a clearer vision. Continue reading this blog to know the top 5 myths, believed by most prospective used-car loan borrowers.

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 second-hand car loan and get the model. All you need to do is check the manufacturing date 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 Offers the Lowest Interest Rates

You must know that car dealers are not financing providers, and thus you cannot expect them to offer a lower interest rate. Muthoot Capital gives you the best lowest interest rates on your second-hand car finance so that you manage your EMIs without compromising on your other commitments. Car dealers might manipulate you to buy new cars and charge you higher interest rates. You must consider your financial situation and make a decision.

Myth 3 – Applying for a Second Hand Car Finance is Unmanageable

Today everything has evolved and been compelled to be digital. Right from submitting documents to getting the amount, everything can be done online. Nothing about applying for the loan is chaotic. You can fill out the application form for second-hand car finance online and upload the documents for verification. You can even take the help of a used car loan calculator to calculate your EMI online to be prepared for the approaching commitments. Applying for the loan with Muthoot Capital involves minimum documentation and does not often ask you to visit the branch.

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. Muthoot Capital disburses up to 95% of the total used car loan amount. You must make some downpayment while you buy the second-hand car to get the best interest rates and a comfortable EMI plan.

Myth 5 – Strict Eligibility Criteria for Car Loan

Besides getting flexible tenure and interest rate, you also get flexible eligibility criteria. The age limit outlined to be eligible for the loan is 21- 65 years. All self-employed, salaried, and farmers can avail of the loan.

The minimum income requirement is 15,000 per month. The documentation involved to avail of the used car loan is minimal and involves only residence proof, income proof, and identity proof. IDs issued by the government like Aadhaar Card and PAN cards are generally accepted as photo ID proof and residence proofs. Other documents involved are bank statements and passport-size photographs. Muthoot Capital even offers a used-car loan without income proof or on an asset.

Also Read- Looking for a Valuable Loan for a Used Car? Here are the Points to Remember

These were the top 5 myths you must know before choosing a lender to take a used car loan. You can also choose to use the used car loan calculator to calculate your loan EMI online without getting involved in chaotic mathematics.

Muthoot Capital provides up to 95% of the loan amount for used cars. The loan amount ranges from 50,000 to 10 lakhs, and the repayment tenure can be anywhere between 12-60 months. To find your second-hand car finance eligibility and interest rate on your credit score, contact us.

About Author
Muthoot Capital Services Limited is one of India's most progressive financial companies. It is the part of Muthoot Pappachan Group which carries a legacy & trust of more than 133 years.

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