Used Car Loan Eligibility Criteria & Documentation
Used car market in India is growing by leaps and bounds. The trend among younger generation to change vehicles every few years, has resulted in thousands of cars getting added to the used car pools. As a buyer, one can either purchase a car directly from the original owner or go through certified car dealers.
Banks understand that many people prefer buying these second hand cars for various reasons. So in order to help such customers, banks offer a wide variety of second hand car loans and allow borrowers to customize the loan according to their needs. But to ensure that application for second hand car loan is processed quickly and without any hassles, it makes sense to have a thorough understanding of car loan eligibility criteria and documentation requirements.
As far as loan amount is concerned, lenders are willing to fund upto 90% of the valuation of car or the actual sale price (whichever is lower). These loans are offered for a period of upto 60 months and are generally 3% to 4% costlier than new-car loans.
For the borrower, there are few income related eligibility criteria. A salaried individual needs to have a minimum annual income of Rs 3 lac and should have been in employment for atleast two years (of which, one year should be with the current employer). For the self-employed professionals, the minimum income should be atleast Rs 2 lacs and the person should be in business for atleast 3 years.
Apart from meeting these car loan eligibility criteria, borrowers also need to submit some documents to support their loan application. The document requirements are listed below:
- Identity Proof: Can be in form of PAN Card, driving license, passport or any other government issued identity document
- Age Proof: Since borrower needs to be more than 21 years old, a document supporting age needs to be submitted. Example: School leaving certificate, Passport, Ration Card, Driving License, etc.
- Address Proof: Any of the above mentioned documents having current address can be submitted as address proof
- Income Proof: For salaried individuals, ITR/Salary Slips/Form-16 can be submitted. For self-employed individuals, ITRs or balance sheets/P&L accounts can be submitted.
- Signature Verification Proof
- 1 or 2 recent photographs
Once above listed documents are provided, it's easier for lenders to complete their evaluation process and disburse the used car loan quickly.
So when you do plan to buy a used car through second hand car loan, make sure you ensure that you meet all eligibility related criteria and provide all the necessary documentary proofs.
Visit tatacapital.com/cars to know more.