Originally published at: https://www.mawazna.com/blog/getting-a-used-car-through-car-loans-in-pakistan/
When the time comes to purchase a new car, the majority of people do not have the savings in place to purchase the vehicle outright and so, they need to consider car loans in Pakistan. At Mawazna.com, we make it possible to compare car loans so that you can find the right deal for you. It is important that you find a car loan that works for your budget and what you can afford because it is a big commitment. Many of the large banks such as HBL, UBL, Bank Alfalah, Allied Bank and Faysal bank offer a variety of car loans and auto loans including car Ijarah in Pakistan to help people purchase a used vehicle. At Mawazna car loan comparison platform, you can compare, evaluate all car loans based on your own specific needs.
Financing Used CarsIn Pakistan, many of the banks were not interested initial days in providing financing for used cars although this has now changed due to the increase in the used car market, including used imported vehicles. It is now possible to find that many of these large banks in Pakistan are willing to offer finance for used cars. Approximately all banks now provide financing for used cars alongside new cars where the payments are paid in instalments.
What Does the Used Car Financing Process Consist of?In the main, the procedure for obtaining used car loan in Pakistan is the same although the process can differ between banks. When the time comes to apply for car finance, not only will the process be the same but the documentation involved as well as the legibility criteria will also be the same, regardless of whether it is a new car or a used car. You provide car make, model and the pricing information for the car you would like to buy and then you also confirm the down payment (your part of the contribution towards price of used car). You will have to contribute for a minimum amount of 15%. Banks then evaluate the case basis on this information and they also review your eligibility criteria and the credit history. They then confirm the amount they can lend you to buy your used car.
Eligibility CriteriaIt is common for banks to expect applicants to meet specific criteria and provide relevant documents as well as produce financial security in order to begin the process of putting car finance in place.
One common criteria is that banks require applicants to be between the ages of 22 and 65 while they must also be a citizen of Pakistan. The age bracket can be different between banks but these differences are often small.
Applicants must also have an income that is steady and reliable and enables them to afford the repayments for the loan. The source of income can come from rental income, business income or the more obvious salary income.
When it comes to documents, applicants are expected to provide a passport sized photograph that is accompanied by a copy bank statements for a certain period, salary certificates for salaried individuals and a National Identity Card. Some banks may request additional documentation in order to further clarify suitability but this can be dependent on the amount of income.
What Happens Next?Once applicants have met the eligibility criteria and the relevant documentation has been provided, the case for financing is put forward so that it can be processed further. Here the case will be verified and any pre-approval checks will be carried out to make sure that the applicant is financially stable and does not pose a risk to the bank. Following approval from the bank, an arrangement is put in place for the vehicle to be delivered at which point any costs that need to be paid up front will be made.
In the main, the rates vary between 17% and 21% but this is dependent on the period over which the financing has been taken over as well as the overall finance arrangement. As there are now so many Banks offering car finance including Islamic finance (Car Ijarah) it is important that you take the time to compare car financing so that you can find the right car finance deal to suit your needs and circumstances.
Mawazna.com is a growing financial services comparison platform in Pakistan that enables consumers to make more informed decisions when choosing financial products and services including car financing, personal loan, home financing, health, car, and travel insurance comparison, selection and buying an insurance policy offered by leading insurance companies of Pakistan. Visit us online to compare banking (all loan products including car loans in Pakistan), insurance (car insurance, travel insurance, and health insurance) and broadband products to make more informed decisions.
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