{"id":4776,"date":"2023-08-28T12:44:01","date_gmt":"2023-08-28T12:44:01","guid":{"rendered":"\/blog\/?p=4776"},"modified":"2024-12-18T15:13:34","modified_gmt":"2024-12-18T09:43:34","slug":"a-used-car-loan-or-personal-loan-for-a-car-which-one-is-better-for-you","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/loan-for-vehicle\/a-used-car-loan-or-personal-loan-for-a-car-which-one-is-better-for-you\/","title":{"rendered":"A Used Car Loan or Personal Loan for a Car, Which One is Better for You?"},"content":{"rendered":"\n

The pre-owned or used car market in India has been growing in double digits. A lot of people are opting for used cars rather than buying a new one due to constrained budget, or just for the sake of refining their driving skills before buying a new car. <\/p>\n\n\n\n

Know More About Used Car Loan<\/a><\/div>\n\n\n\n

Are you also planning to buy a pre-owned car and are confused between a used car loan or a personal loan? Here are the things that you need to consider before you decide:<\/p>\n\n\n\n

Focus on the Interest Rates <\/strong><\/p>\n\n\n\n

A large chunk of your EMI goes in paying\nthe interest on the loan. Therefore, you should take a loan which offers you\nthe lowest interest rate. Usually, the interest rates for personal loans range\nfrom 11% to 24% while for used car loans, it is between 14% – 18%. However, a\nlot depends on your CIBIL score, employment, age and income. If these are on\nthe right track, the bank can offer you lower interest rates. <\/p>\n\n\n\n

Loan Amount<\/strong><\/p>\n\n\n\n

If you opt for a used car loan, lenders evaluate your car and offer you a loan amount based on this value. This ranges from 70 to 90% of the valuation amount. For example, if your car is worth Rs. 7 lakhs and the lender values it at Rs. 6 lakhs, then the lender will value your car between 70 to 90% of Rs. 6 lakhs, which ranges between Rs. 4,20,000 to Rs. 5,40,000. The rest of the amount will be your down payment. The advantage of a personal loan<\/a> is that you can use the entire loan amount and also skip the valuation process. <\/p>\n\n\n\n

Tenure <\/strong><\/p>\n\n\n\n

Tenure plays a major role in getting a used car loan<\/a>. Usually, you won\u2019t get a loan for a pre-owned vehicle that\u2019s beyond 5 years. The older the vehicle, the shorter will be the tenure of your loan, which means higher EMIs per month but faster repayment of the principal amount. However, if you opt for a personal loan, you will get a tenure of up to 5 years to repay the loan. That\u2019s regardless of the car\u2019s age or condition. The longer the tenure, the higher the interest rate.  <\/p>\n\n\n\n

Your Credit Score <\/strong><\/p>\n\n\n\n

Have a poor credit score? A used car\nloan can really come to the rescue. That\u2019s because a personal loan is an\nunsecured loan, therefore it is only handed out to people with a reliable\ncredit score and income. Used car loans are secured, that\u2019s why even if you\nhave a poor credit score, you can still get a quicker loan approval and drive\nthat car you\u2019ve been waiting for. <\/p>\n\n\n\n

Quicker Loans for a Fast Moving World<\/strong><\/p>\n\n\n\n

Here again, the tides are in favour of\npersonal loan as you can get it processed within 1 to 5 days. The process for\nused car loan is more tedious and longer as it involves more paperwork. That\u2019s\nbecause the lender has to check all the car documents and also go through a\nthorough examination and valuation of the car. This process usually takes a\nweek or more to disburse. <\/p>\n\n\n\n

It All Comes Down to(Conclusion):<\/strong><\/p>\n\n\n\n

If you have a good credit score then a\npersonal loan might be better since you will get a better interest rate, lesser\ndocumentation and quicker processing of your loan. If you are struggling with\nyour credit score then a used car loan is a better strategy as it comes with\ncollateral security of your car, has a shorter tenure and lesser repayment of\ninterest in the long-term. <\/p>\n\n\n\n

Why Tata Capital?<\/strong><\/p>\n\n\n\n

Be it a personal loan or used car loan, Tata Capital offers you both options with the lowest interest rate and the quickest disbursal of your loan.<\/p>\n\n\n\n

Apply for Used Car Loan<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

The pre-owned or used car market in India has been growing in double digits.<\/p>\n

Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":4782,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[27],"tags":[],"class_list":["post-4776","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loan-for-vehicle"],"yoast_head":"\nA Used Car Loan or Personal Loan for a Car, Which One is Better for You? - TATA Capital Blog<\/title>\n<meta name=\"description\" content=\"Confused between a personal loan vs used car loan? 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