Buying a used car on loan and EMIs is becoming rather common these days. After the pandemic, the need for personalised mobility has increased manifold. This created a lot of demand in the used car market for vehicles. People have been flocking to the second-hand car market to get vehicles at attractive prices. That has created a massive boom in this industry. This trend carries on even after the lockdown. Hence, banks and other NBFCs are offering attractive financing opportunities to facilitate the purchase of used cars. Here are the top 5 benefits of buying a used car on EMIs.
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Buying a Used Car on EMIs
Flexible Loan Tenures
The most attractive element of a loan is the fact that it offers flexible repayment options. In this way, you can make a choice depending on your personal situation. Obviously, if the duration is longer, the EMIs will be lower and vice versa. Generally, banks or NBFCs offer repayment duration anywhere from 12 months to 72 months. This should ideally incorporate the financial situation of just about everyone.
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Predictability
The second most important aspect is predictability. When you have a predecided monthly instalment, you can plan your finances accordingly. In this age, where finance plays a crucial role in deciding your lifestyle, knowing your exact monthly expenses is critical. That is why people prefer to buy things on EMIs so that they can plan from the very beginning.
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Affordability
Now while you are already getting a vehicle at a lower price than a new one, the fact that you can further break it down into EMIs is just great. We know that the depreciation of vehicles happens at a rapid pace. Therefore, as soon as the vehicle finds itself in the used car market, you can be assured that the asking price of the car will be significantly lower compared to the same model in a brand-new configuration. Hence, you are able to afford a lot more with the same amount of money.
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Budgeting
This point goes hand-in-hand with the aforementioned predictability factor. You are able to budget your monthly expenses in a much better way when you already know the exact amount that you have to pay in the form of EMIs. That is also the reason why some people always prefer to take loans rather than pay for the entire commodity upfront.
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Credit Score
Finally, we will also have to talk about credit score. When you take a loan, the discipline with which you repay it is critical for banks and other financial institutions to determine your behaviour towards credit. If you repay the EMIs regularly without fail, your credit score will go up. This could come in handy at a later stage of your life when you go out to get a new loan. The banks will know that you are a trustworthy customer and will even get a discount on the interest rates depending on the credit score (also called CIBIL score). These are the top 5 benefits of buying a used car on EMIs.
