Used Car Loan Vs Personal Loan: Which is Better
In order to buy a used car the first thing a person does is budget for it and see how the finance will be arranged. At times they borrow from friends or family. But most of the times people consider borrowing a loan from a finance company or a nationalized bank. The two most common types of loans people take for online purchase of used Ford EcoSport in Bangalore are used car loan and personal loan. But each of these loans has its own set of advantages and disadvantages.
Used Car Loan
This type of loan is usually made available to people with different types of employment histories. You can find out your eligibility for this loan from the bank’s website or by talking to a representative. However, you are eligible for up to 80% of the value of the used car only. This valuation will also be the one set by the lender and not the seller. This means you cannot finance the whole purchase amount from the loan.
You don’t need a very good credit score for this loan because you are required to hypothecate the car with the bank or finance company for the tenure of the loan.
Personal loan is not easily available to anybody who does not have a good credit rating or a good relationship with the bank. The interest rate charged in this type of loan is higher but there is no need to hypothecate your car. Since the amount of this loan does not depend on the valuation of your car you can avail full purchase amount and pay for it.
The rate of interest, loan’s tenure, and EMI amount can be negotiated. Early repayment of this loan is possible depending on the terms and conditions of the lender.