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?
- The applicant’s age must be between 21 and 65 years
- 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
- 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
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!