Used Car Loans

A used car loan is a facility provided to individuals who are willing to buy a second-hand car but do not have enough savings for that purpose. In such cases, a scheme of used car loans comes handy, as they provide funding and give a tenure period of 7 years to repay the credit.

We will take a look at the features and benefits that come along with the scheme of used car loans:

• The loan amount of a used car loan might be less than that of a new car loan. Thus the monthly EMIs that are to be deposited by the borrower is also low.

• It avails the borrowers a long flexible tenure period to repay their loans.

• In the case of a new car loan, the major part of the financing is done by the institution crediting a car loan. But in the case of a used car loan, some banks and NBFCs provide 100% financing.

• The procedure of applying for a used car loan is very simple and everyone can avail of it. Moreover, online application is also available for the borrower’s convenience.

• The charges of insurance cost and depreciation rates are comparatively lower than that of a new car loan.

• This scheme of a used car loan deals with minimum paper works so as to make the procedure easier for the applicant.

• Many financial institutions, like banks and NBFCs, offer a range of flexible repayment terms.

We further discuss the eligibility criteria of the two types of employees, namely, salaried employee and self-employed individual:

• Salaried Employees-

1. Age limit- A borrower who has a monthly stipend or salary, should be between the age limit of 21 to 65 years of age. One should not increase the age of 65 while the time of maturity.
2. Income- The minimum income level required for getting a used car loan is INR 15,000/ month. Some banks even avail this scheme under INR 10,000/ month salary level.
3. Income status- The individual applying for the loan must have had a work experience minimum of one year. Frequent change in a workplace might create a hurdle while getting a used car loan approved

• Self- employed Individuals-

1. Age limit- The age limit set for self-employed individuals ranges between 25 years to 65 years. Again, the age of an individual should not increase 65 years while the loan matures.
2. Income- The income level of a self-employed individual should not be less than 1.5 lakh/ annum. Having a salary level below the minimum level might be a problem while opting for a used car loan.
3. Income Status- The individual must be in the same line of business for at least 3 years, so as to secure eligibility for a used car loan.

On fulfilling these criteria one can avail SBI car loan, one of the reputed institutions availing this scheme under various benefits and offers.

In the last section, we will take a quick look at the list of documents needed to apply for this loan:

1. Application form- An individual has to get hold of an application form if he/ she is interested in avail of this scheme of a used car loan. This can be availed from the particular institution from where the loan is to be secured or it could be done online as well.
2. Car valuation report- Before selecting a used car loan, the car that is to be purchased should be selected and further safety should be insured for the future. Then the bank decides the credit amount on the basis of its cost. Some financial institutions pay for 100% of the expenses.
3. Identity proof- Anyone willing to apply for a used car loan must prove his or her identity by providing an Aadhar card, Passport, driving license, voter ID card, or a PAN card.
4. Address proof- Evidence regarding one’s original address is to be provided by any one of these: Voter’s ID, Electricity bill, Aadhar card, Driving license, etc.
5. Income proof- As car loans are unsecured loans thus a proof of one’s income level can be provided by Balance sheets, Audit sheets, Form 16, Salary slips, Or bank statements.

Also Read This-Car loan procedure