By Namit Jain
The car is no longer a luxury. It has become an essential purchase that allows you to easily move around in the comfort of your private space. Car finance is one of the largest categories of consumer credit in India. In particular, used car financing has become one of the fastest growing segments. The segment made a strong comeback in 2022, registering annual growth of more than 60%. The industry is estimated to grow at an annualized rate of 20% and will hit the $10 billion mark by 2027. According to a CRISIL report, around 4.2 million Indians are driving the demand used cars in the country and used car sales soared 115% during the lockdown.
Unsurprisingly, getting a loan to buy a used car has become easy since fintech companies entered the segment to deliver innovative consumer experiences in partnership with banks and NBFCs. Fintech has made loan processing easier and more user-friendly. The customer today appreciates the luxury of choice; just like a home loan or a loan against jewelry, you can easily get a loan for a used car.
How fintech companies are helping consumers buy used cars
Fintechs have focused on bringing digitization, creating price comparison tools and platforms that provide transparency in lending options to potential borrowers. The intuitive journey with paperless and instant loan penalties is now becoming a reality in auto loans. You can get up to 100% financing for your car at attractive interest rates and longer repayment terms. Moreover, you can get the loan amount disbursed seamlessly at the car dealership with hardly any waiting days.
Dedicated digital platforms: Seeing the growing demand for new and used car finance, several OEMs and financiers have deployed dedicated digital platforms to provide car finance solutions to customers. To get a better deal, do proper research before applying. While most lenders can offer you up to 80% financing, several products also offer 100% financing down the road.
Also read: 5 things to keep in mind when choosing a used car loan
Credible platforms: A major reason for the growing popularity of fintech companies is that these platforms offer tailor-made products personalized according to the user’s repayment capacity, repayment history, and desired budgets. Compare these platforms’ offerings for speed of approval, minimal paperwork, competitive interest rates, flexible EMIs, and transparency. These will guide you in choosing the best fintech platform for your needs.
Painless process: The platforms are designed to make the entire lending journey super easy and convenient while ensuring a fast turnaround time. With Video-KYC, Account Aggregator, e-NACH and e-signing, it is now possible to benefit from a car loan without having to leave the comfort of your home. The whole process is seamless, requires minimal paperwork, and more importantly for you, approval takes minutes instead of days. Once approved, the loan is disbursed immediately.
Things to keep in mind when getting a used car loan
Finally, find out about your budget and loan and interest terms to avoid unpleasant surprises along the way. Check that all papers, i.e. insurance and registration certificate are in place. Once you finally take out a loan and deliver the car, remember to have the title transferred to your name and the mortgage added to your financier.
Also Read: Buying a Used Car? Tips for getting a loan
Refinance your existing car
If you already own a car, the good news is that you don’t have to go anywhere else for your personal use top-up loan needs. You can qualify for a refinance loan on your existing car and use the money to meet your personal expenses. With very limited documentation, you can qualify for a loan of up to 200% of the value of your existing car at attractive rates.
(The author is co-founder and CEO, Rupyy).
(The opinions expressed above are those of the author and not necessarily of financialexpress.com)