Are you planning to apply for a used car loanwith a co-signer? It is certainly possible, provided the co-applicant successfully fits the eligibility criteria. Yes, you read that right! Not everybody can be deemed eligible by the lenders to be a car loan guarantor.
Eligibility criteria for a co-applicant
The following sections deal with the eligibility criteria and the advantages of having a used car loan co-applicant.
Relationship with the borrower
Although this criterion varies from lender to lender, many financial institutions quickly approve the loan if the co-applicant is closely related to the borrower. In general, people who you share a blood relation with can easily become co-applicants. Know that this condition is not mandatory, but preferred.
Decent credit rating
The person who you wish to avail a joint used car loan with needs to have a good credit history of making all their previous payments like loan EMIs and credit card bills on time. Usually, lenders appreciate credit scores greater than 750 while approving used auto loans.
Additional Read: Tips to make used car loan application process easy
Naturally, financial institutions approve of co-applicants who have a stable source of income. In order for them to verify this, the co-applicant needs to submit a proof of their income to the lender in the form of bank statement, paychecks or any other related documentation.
Proof of residence and employment stability
While this is not mandated for a co-applicant to get approved, some lenders ask for proofs that show a permanent residence and a consistent flow of income.
The aforementioned are some of the basic requirements of co-signing used car finance in India. Remember that the co-applicant is equally responsible for paying the monthly instalments on time. If the borrower fails to do so, the co-applicant is liable, and thus they need to be completely aware of their responsibility as a co-signer.
Advantages of a used car loan co-applicant
If you are worried about your used car loan eligibility, getting a co-applicant to co-borrow is one of the easiest ways to enhance the approval chances. Here are some more benefits of having another person sign up for a used auto loan along with you
Additional Read: How to Improve Your Chances of Getting a Used Car Loan?
Reduces interest rates
The used car loan interest rates tend to be lesser when you have a co-applicant. This is because the inclusion of a second person increases the chances of loan repayment and makes lenders confident about approving the loan.
Ensures good credit history
Since the borrower tends to pay all their bills on time, it significantly improves the credit rating of the applicant.
It is thus a wise idea to choose used car finance with a co-applicant. However, we advise you to conduct thorough background research on the different financial institutions available and choose one that offers customer-centric services like Tata Capital.
Tata capital offers used vehicle loans with quick processing, competitive interest rates and minimum documentation.
Head to our website to check our attractive interest rates and used-car finance eligibility criteria. You can also accurately figure out your potential monthly instalments with us by using our used car loan EMI calculator.
So, what are you waiting for? Buy a great car without worrying about the finances today!