If you want to buy a car and are short on funds, a second-hand car can be a budget-friendly option. The second-hand car market in India has grown significantly in the past few years. As a result, it is now not difficult to come across pre-owned cars that are not just budget-friendly but in great condition too.
Moreover, some top lenders in India now also offer loans for purchasing a second-hand car. Used car loan just works like a normal car loan that you take for purchasing a new car. Here are some important details about loans for pre-owned cars-
1. How much used loan can you borrow? What is the loan tenure?
Depending on your eligibility and other factors, a lender can offer up to 80% of the valuation of the 4-wheeler as second hand car finance. Most lenders offer such loans for up to 5 years.
You can go for a shorter tenure to repay the loan sooner. But shorter tenure will increase the EMI amount. So, make sure that you select a loan amount and tenure whose EMI you can easily afford.
2. What are the Eligibility Requirements for Used Car Loan?
Every lender has its own eligibility criteria on the basis of which they approve or reject loan applications. The requirements generally revolve around your monthly income, occupation, work experience, credit score, and age.
You can check the eligibility requirements of a lender by visiting their official website. Most lenders also have eligibility calculators online for enhanced convenience.
3. What are the Documents Needed to Apply for Used Car Loan?
Just like the eligibility requirements, the documentation needs vary as well. However, most lenders will require you to submit at least your ID proof, address proof, and income proof.
You’ll be required to submit these documents along with a loan application form online or offline.
4. How to Apply for Used Car Loan Online?
Most lenders now allow you to apply for used car finance online. For online application, you’ll be required to fill a loan application form and submit the same along with the required documents.
After submitting the documents, the lender will then start the approval process. If the loan is approved, the lender will then disburse the loan amount which you can use to purchase a used car of your choice.
5. What are the Additional Charges When Applying for a Used Car Loan?
Apart from the second hand car loan interest rate, you should also check the additional charges of the lender before applying for the loan. Most banks require you to pay a few different fees such as loan processing fee, documentation charges, CIBIL report charges, and registration certificate collection charges.
There are also charges for prepayment, cheque bounce, amortization schedule, duplicate NOC, and loan cancellation. Ensure that you check these charges thoroughly before signing on the loan documents.
Purchasing a Pre-Owned Car with a Used Car Loan
Purchasing a used car is already a budget-friendly option and the loan only makes it more favourable for the buyers.
With attractive used car loan interest rate, flexible loan tenure, online loan application, and loans of up to 80% of the value of the car, you are sure to experience utmost convenience and affordability when purchasing a pre-owned car. Select a lender carefully to enjoy the amazing benefits of taking a used car loan.