Used car loans are very commonly available in today’s time. With the growth of the used car market, the number of lenders offering such loans have also significantly increased over the past few years. While most people are pretty acquainted with the usual financing available when you buy new cars, used car loan financing is a relatively new concept. Although, it has become quite popular in India and all across the globe as one of the best ways to buy a pre owned or used vehicle.
Taking any loan is a matter of deliberation and careful consideration and a used car loan is no exception to that. No matter how much you want that car, and how easily you can get that loan, you need to essentially keep in mind a few important things before you apply for such loans. It will make sure that you make the right decision and can put your money to its best possible use.
There are a few very important things that you need to remember when applying for such loans and here they are listed below:
- Generally, the interest rates of used car loan financing is higher than that of regular car loans. Nonetheless, you need to go for the lender with whom you pay the least interest charges for the loan.
- A lot of lenders do not provide a used car loan for vehicles that are more than 3 years old. Make sure you ask your lender about their terms regarding the age of the vehicle.
- The insurance cost of the vehicle will generally not be covered under the loan.
- You need to know about the loan repayment terms, tenor and everything else about the loan. It is pretty easy to get a second hand car on EMI but knowing if it suits your repayment capabilities is crucial.
Used car loans are pretty easily available and quite accessible as well. With several lenders offering loans for used cars, you might as well get one pretty conveniently. Although, what’s important is to know about the eligibility criteria and documents required for such loans. While it varies from lender to lender, there are a few common and basic criteria and requirements for used car loans. Let us take a look at them.
Used car loans are available both for salaried professionals and self-employed individuals. The eligibility under both categories are as follows:
For Salaried Professionals
- Age Limit: 21-65 years of age
- Income: A minimum of ₹15,000 per month
- Income Status: The employment tenure must be at least one year at the current organization.
For Self-employed Individuals
- Age Limit: 25-65 years of age
- Income: The business they own must earn a revenue of at least ₹1.5 lakh per year.
- Income Status: The business must be operating for at least 3 years.
Next comes in the documents required to get used car loans approved. This also varies based on the lender but here are the common documents required by most lenders for a used car loan.
- A properly filled out application form
- Passport-size photographs
- The valuation report of the used car
- Identity Proof and KYC documents (Aadhaar Card, Passport, Driving License, Voter’s ID, PAN Card, etc.)
- Address Proof (Utility Bill, Aadhaar Card, Driving License, Ration Card, Passport, etc.)
- Income Proof (Balance sheet, Audit sheet, Form 16, Salary slip, Bank statements)
Applying for used car loan financing is the easiest job. Numerous lenders offer both online and offline options to apply for such loans. You can visit the bank or finance company’s office, visit their website or even talk to their representatives to know the best course of progress and easily apply for such loans. A lot of lenders also have representatives at various used car dealerships. They can help you get such loans along with all other details about how to get a second hand car on EMI. Weigh out your options and then make the best choice based on your requirements.
High Loan Value
Budget should also not be a restrain when planning to purchase a second hand car loan as eligible candidates can easily raise funding of up to Rs.50 Lakh as used car loans. Thus, you can easily choose a high-end vehicle model for purchase irrespective of its resale value and differ its payment to an extended duration through EMI payments every month until the loan tenure completes.
Used car finance makes it significantly convenient for you to purchase the used vehicle of your choice without you having to strain your budget. The EMIs payable are affordable too, so you can accommodate them easily in your fixed monthly expenses.