Are you planning to buy a second-hand car that has all the right features and fits your budget? Are you looking for the best ways to finance a used car but do not have proof of income? Read on.
Whether you are unemployed or do not have the right documents to verify your non-traditional income sources, you can still get a used car loan without income proof. Although there are several provisions to apply for a loan in the absence of income documents, they can vary from lender to lender.
Here are a few steps you can take to apply for a loan without a salary slip.
1. Other income sources
Financial institutions will only lend you money if they are confident in you repaying the loan amount. If you are unemployed but have a monthly cash inflow of money in the form of dividends, house rent, pension, etc., you can include this information in your application. This will give you a better shot at getting your loan request approved.
2. Good credit history
A good CIBIL score will build trust in the lender that you handle your credit obligations well. Your credit history coupled with other income sources can help you get used car loan financing.But keep in mind that a low credit score will reduce your chances of getting approved.
Additional Read: How a Good Credit Score Can Be Beneficial for Used Car Loan
Not all lenders will approve your loan request based on your credit history and non-traditional income sources. In such a scenario, you can ask someone with a stable income and good credit score to co-sign your loan. While this improves your chances of getting approved, keep in mind that this person will also be equally responsible for the loan repayment. This means a missed payment can reflect negatively on both your credit scores.
4. Find a guarantor
Another way to secure second-hand car loan is to ask your family or relatives to act as a guarantor. While a co-signer becomes immediately responsible for the repayment of the loan, a guarantor will only step in if you fail to fulfil your obligations. You must ensure that your guarantor has a good credit score and income proof.
5. Use collateral
You can use assets like gold or land as collateral to make up for your lack of income evidence. The collateral will offset the risk for the lender and make it easier for you to get your request approved. The lender will evaluate the value of the asset and calculate the loan amount that you will be eligible for.
Additional Read: Want a Used Car Loan? Here’s What You Should Know
Get a used car loan with Tata Capital
While most lenders offer affordable used car loan interest rates, applying for one without relevant income documents can draw high rates of interest because of the risk associated with it. If you are looking for an easy loan approval process and flexible EMI options, then Tata Capital’s used car loan will be your ideal choice.
You can also visit our website and use our used car loan EMI calculator to check your potential EMIs. Apply now to avail of competitive interest rates today!