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Tata Capital > Blog > Loan for Vehicle > All You Need To Know About Used Car Loans

Loan for Vehicle

All You Need To Know About Used Car Loans

All You Need To Know About Used Car Loans

Buying a pre-owned car is an affordable alternative to owning a brand-new car. Besides giving yourself the convenience of travelling in a four-wheeler, you can save money on the market price and depreciation value and get attractive used car financing options.

To ensure your loan application process is hassle-free, here’s everything you need to know about used car loans. 

What are the benefits of a loan for used cars? 

  • Since used cars cost less than brand-new cars, you’ll apply for a smaller loan amount, which means you’d pay smaller EMIs.
  • Some lenders may finance 95% to 100% of your car value.
  • They are convenient and easy to avail. To get a used car loan, apply online with minimum documentation and get quick approval. 
  • If your business requires frequent driving, you can get a second-hand car loan for business use and claim tax benefits. 

What are the standard used car loan eligibility conditions? 

Age

  • The applicant’s age must be between 21 and 65 years

Income

  • Salaried persons should have a monthly income of at least Rs. 20,000
  • Self-employed individuals should have an annual income of Rs. 2 lakhs

Work Stability

  • Salaried persons must have a steady employment status of at least 1 year
  • Self-employed individuals must have a stable business at least 3 years old

Additional Read: What to Look for in a Used Car Loan Agreement

What are the interest rates on second-hand car loans? 

While interest rates on these loans depend on your eligibility, you can qualify for more competitive used car loan interest rates if:

  • You have a high, steady income.
  • You have an excellent CIBIL score and spot-free credit history.

How to apply for a loan to buy a used car? 

Step 1-Application: Start your application by completing the online application form.

Step 2- Documentation: Pre-owned car loans require minimal documentation, as listed below. 

  • Submit a photo id such as your Aadhar Card, passport, or voter id.
  • If you’re salaried, submit a copy of your salary account statements or salary slips for the last three months.
  • If you’re self-employed, submit a photocopy of your income tax returns, audited balance sheet, profit and loss statements, and your bank statements for the last three months.
  • Submit your electricity bill, phone bill, or ration card.
  • If you’re self-employed, you must submit your business’ registration documents or property-tax receipt.
  • Submit a copy of the registration certificate for the car you are purchasing. 
  • A copy of your signature with signature proof. 

Step 3- Verification: The lender will cross-check your documents, determine your eligibility and approve your application.

Step 4- Loan sanctioning and disbursal: Once approved, your lender will sanction your loan and disburse the respective amount within 36 hours of approval. 

Additional Read: Tips to Reduce Your Used Car Loan Interest Rate

Final thoughts

Own the car of your choice without compromising your savings by seeking used car finance options from a reliable lender. Check out Tata Capital’s customized second-hand car loans. We extend up to 100% financing on select cars, attractive interest rates and flexible repayment options. Visit our website to learn more and apply today! 

Apply Now

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