NBFCs are institution that does adhere to the guidelines provided by the Reserve Bank of India when it comes to loans, but they do not possess a fully authorized banking license. But they make up for it with their benefits which covers a vast area, especially loans for used cars. Some of them are listed in the article itself.
Burden Less Documentation
Applying for loans in the bank can be a bit troublesome since the person who is asking for the loan has to show a plethora of documents. On top of that, the entire process can also be quite a time consuming and may test the patience of the said person. To avoid such hassles, the person needs to know the benefits of NBFC loans. Muthoot Capital provides some extraordinary benefits in the loans for used cars section.
Easy Interest Rates
Generally, Bank interest rates are higher than that of NBFCs. Bank interest rates can go upto 9% to 20%, compared to that NBFCs charge a negligible amount. The loans are approved on vehicles which had been used for ten years or more. The loans get approved faster on the used cars as well. Some of the companies also provide remarkable Loan Against Vehicles (LAVs).
Flexible Repayment Options
Banks are known for their ruthless return policy and are considered to be not quite flexible as one would hope them to be. They allow very little time for repayment and are strict about the time. On the other hand, NBFCs provides flexible payment schemes which can be extended to more than 60 months. The special construct schemes for people who are looking for loans, and base their instalment payment scheme on the income rate of the person who is applying for the loans. The interest rates are affordable as well.
If you are taking a loan for used cars, then the loans schemes are mostly in your favour. They are extremely affordable and payable if you compare it to the schemes that are drafted for the new cars. NBFCs usually provide up to 95% funding as a loan facility beginning from Rs. 50,000 to 10 lakhs. So, it banal to worry about the expenditure when such benefits are provided to the person applying for loans. Few charges are attached to it, which are non-fundable mostly, but quite negligible as well. Charges such as nominal charges, registration charges, and some more minimal charges related to it.
NBFC loans come with added benefits which make them quite approachable and affordable. For one, the most important change that they made was giving loans based on the income and not based on assets as done by the banks. Some provide a flat rate of interest on a loan, under which you can pay the interest on the principal amount till maturity. There is an option of pre-payment which allows the person to pay the instalment early. Other than this, they have included reduced EMI rates, zero interest rate on EMI, long tenure, and hassle-free, quick procedures. Some companies avail top-up offer car loans for immediate financing. And this is just the tip of the iceberg when it comes to the benefits.
Simple Terms and Conditions
The loans are issued depending on the model, age, condition, history, and basic banking associated with the car. Except this, some other eligibility criteria are mentioned below:
- Occupation- The person applying for loans should be a salaried individual or a self-employed individual.
- Age Group- Not everyone can apply for a loan; only people belonging to the age group of 21 years to 60 years can apply.
- Residence- The person needs to have a permanent address where he is residing for at least a minimum of 1 year. Relevant documents to be applied to prove it.
- Employment stability- The person worked for a minimum of 1 year.
- Connection- People who have a telephone or landline connection.
- Income Range- the person should have a minimum salary of 15000 per month.
EMI Calculator Estimation
Used car loans EMI calculator works in favour of the customers who are thinking of applying. This digitally calculates the loan amount, interest rate, and principal amount to bring out the payable EMI amount and payable interest amount. This will make the applicant know about the exact amount that he/she needs to pay, which in turn enables him to plan ahead of time. This gives them an idea of monthly instalment scheme and the affordability of it.
The Final Verdict
When it comes to loans for used cars, it is better to opt for NBFCs, instead of the bank since it provides several different benefits to suit the person who is applying for the loan.