Are used car loans better than personal loans

Loans were introduced long back to benefit people who suddenly face a financial crisis or have been in a financial crisis for quite some time. Various ways have been introduced with time to help you deal with such unprepared crises. There are ample of choices out there for everyone to choose from.

Personal and used car loans are examples of loans you may opt for when you are willing to buy a second hand or a used car. Both the loans have their own pros and cons. You must choose according to your convenience that which one you are willing to opt for your loan requirements.

Here are a few pointers to help you determine which loan is preferable.

  • Different banks offer different interest rates but usually, the interest rates associated with used car loans are generally higher than those with the personal loan, it ranges from 11%–25% in personal loans and 15%–18% in used car loans. So there are greater chances of the personal loan being a cheaper option.
  • For used car loans, you get somewhat 70%–90% of the amount of the car quoted. Other expenses like the down payment and the balance amount are to be borne by you. Contrary to that in the personal loan, you get the entire amount you demand which certainly makes it easy for you to make the entire payment.
  • Used car loans prove to be a little easier to get than the personal loan, thereby making it a much quicker option.
  • The maximum tenure of used car loans is five years. But this tenure is also measured by the age and condition of the used car.

Both the loans are equally helpful in different ways. But one must opt for a used car loan if they do not have a really convincing credit score. Used car loans having a precisely higher interest rate makes it a little difficult to repay. If you certainly do not have any issues with your credit score, you may opt for a personal loan. The decision lies with you as you need to decide the most convincing option for you.

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