People have to consider their budget, needs, and preference while buying a new or a used car. Today, a car loan is easily available. However, it will affect your finances, as you will have to pay the Equated Monthly Installments (EMIs) regularly to repay the loan on time.
While applying for funding of a new vehicle or a used car loan, it becomes essential to determine the EMI you can afford to pay. Let us take an example to understand it in a better way. Mr. Rajiv is a General Manager in a leading multinational company. He earns a salary of INR 2 lakh per month. He is planning to buy a new car and is taking a loan of INR 8 lakh for a tenure of four years at an interest rate of 10% per annum. Here, the monthly EMI will be approximately INR 20,290, which consists of 82% principal and 18% interest. Considering his monthly income, he can easily pay the EMI.
Similarly, Mr. Pratik, an accountant with a reputed company, is drawing a monthly salary of INR 40,000 and cannot pay INR 20,290 as EMI. Here, he will have to look for a new car, which is cheaper, or consider buying a used car. The good news for Mr. Pratik is that lenders like Mahindra Finance offer used car loan for various vehicles.
So, to help you come out of this dilemma, let us evaluate the pros and cons of both these funding alternatives.
- New car loan
If you are looking for a loan to buy a new car, you can consider taking it from Mahindra Finance. It provides you with car finance at competitive interest rates for a maximum duration of five years. Additionally, with Mahindra Finance, you can get up to 100% ex-showroom funding.
- Used car Loan
Mahindra Finance also offers attractive used car loan rates. Here, you can get finance of up to 85% of the used car’s value. The lender offers finance for pre-owned cars that are up to ten years old.
Your current monetary status is an instrumental factor to determine whether you can buy a new car or a used vehicle. If you are unable to purchase a new car, do not get disheartened, as you can buy a pre-owned vehicle for the time being. You can visit the Mahindra Finance website to check the used car loan eligibility criteria and apply for funding.