With India entering the BS-VI era from April 2020, car manufacturing will require advanced technology, triggering price hikes for new cars. Conversely, the reduction in Good and Services Tax (GST) rate on used vehicles from 28% to 12-18% has made used cars more affordable.
If you are looking to purchase a four-wheeler, this is the best time to buy a second-hand car. Moreover, if you are facing a cash crunch, you can mortgage your existing vehicle and obtain a used car loan to tide over the crisis. Tata Capital offers such loans to salaried as well as self-employed individuals. Here are the conditions that you must fulfill to avail of the loan.
Additional Read – Why Tata Capital’s Used Car Loan is a Great Choice when Buying Your First Car
General eligibility criteria for a second hand car loan:
- You should be between the age of 21 years and 65 years, and you must provide proof to confirm this.
- Your monthly income must be at least Rs. 20,000.
- You must have a strong credit score and a good credit history to convince Tata Capital of your repayment capacity.
- Usually, guarantors are not necessary to get a loan for used cars. However, if your income fails to meet the eligibility terms, you can still obtain the loan with a third-party guarantor.
- A fixed-line telephone or a postpaid mobile connection is mandatory, and you need to submit a copy of the bill.
Apart from these conditions, some other specific criteria could be applicable to you, based on your profession. The different requirements are mentioned below.
Used car loan eligibility conditions for salaried individuals:
- You must be employed by any public or private company or a government organization.
- You must have a work experience of minimum two years. Additionally, you need to have been working with your present employer for at least six months.
- Your salary must be at least Rs. 3 lakh per year, and you must submit your last three months’ salary slips as well as salary account bank statements as proof.
Eligibility factors for self-employed individuals:
- If you own a business, you must be a proprietor or a partner. In case of a partnership, you will be required to provide the partnership deed and other business-related documents.
- A minimal annual income of Rs. 2 lakh for either the business or the individual applicant is necessary, and you must provide bank statements as evidence. Copies of your income tax return (ITR), profit and loss statements, and audited balance sheets are also required.
- The accelerated bookbuild (ABB) should be 0.5 times your equated monthly instalment (EMI). You can calculate the EMI using the used car loan EMI calculator on Tata Capital’s website.
- Your business should be in operation for a minimum of three years. A copy of your trade license or the commencement of business certificate is also required to support your eligibility.
Additional Read – A list of documentation that will let you avail a used car loan, instantly.
Tata Capital offers used car loan at attractive interest rates starting from 15%. If you meet all the eligibility criteria for a loan on used car, you can apply online on Tata Capital’s website to get instant approval and cover the cost up to 100% of the ex-showroom price.