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Purchasing a car, whether new or pre-owned, is a significant milestone that can enhance your lifestyle, provide you with the freedom to travel, and even serve as an asset in times of need. While new cars come with the allure of the latest features and zero mileage, used cars offer exceptional value and savings. However, financing a used car can be daunting without the right information. That’s where a used car loan comes into play, making it easier and more affordable to drive away in the vehicle you desire.
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Benefits of a Used Car Loan:
Minimal Documentation
Quick Loan Approval and Disbursal
Lower Interest Rates
Improved Cibil
Eligibility and Documentation:
Eligibility Criteria
To qualify for a Used car loan, applicants usually need to meet the following requirements:
- Age: Applicants should be between 18 and 65 years old.
- Income: Stable income proof is required, which can be from employment or self-employment. Minimum income criteria vary by lender.
- Credit Score: A good credit score (typically above 650+) increases the chances of loan approval and may secure lower interest rates.
- Employment: Salaried individuals should have at least one year of work experience, while self-employed applicants should have a stable business history of two to three years.
- Residency: Proof of residency, such as utility bills or rental agreements, may be required.
- Age of the Vehicle: Some lenders have restrictions on the car’s age. Typically, the car should not be older than 7-10 years at the end of the loan tenure.
Documentation
Prepare the following documents:
- Proof of Identity: Passport, Driver’s License, Aadhar Card, Voter ID Card, PAN Card
- Proof of Address: Utility Bills (Electricity, Water, Gas), Rental Agreement, Passport, Aadhar Card, Voter ID Card
- Proof of Income: Salary Slips (last 3-6 months), Form 16 or Income Tax Returns (last 2-3 years), Bank Statements (last 6 months)
- Employment Verification: Employment Verification Letter, Appointment Letter, or Work Contract
- Vehicle Documents: Seller’s Proof of Ownership, Vehicle Registration Certificate (RC), Insurance Papers, Car Inspection Report (if required by the lender)
- Other Documents: Fully filled and signed loan application form, passport-sized photographs as required by the lender
Interest Rates and Charges:
Interest Rate: Vary between lenders but typically range from 13% to 18% per annum. Fixed and floating rate options may be available.
Processing Fee: Usually 0.5% to 2% of the loan amount, covering administrative costs.
Prepayment Charges: Some lenders impose a fee for early repayment, often 1% to 3% of the outstanding loan amount.
Late Payment Penalties: Fees charged for missed or delayed payments, which can increase the overall cost of the loan.
Avail a Used Car Loan in Simple steps!
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Questions & Answers
What is a Used Car Loan?
A used car loan is a financial product designed specifically to help you purchase a pre-owned vehicle. It functions similarly to a loan for a new car but is tailored to account for the unique aspects of buying used. This type of loan covers the cost of the vehicle, allowing you to repay the amount borrowed over a set period, typically with interest.
What are the eligibility criteria for a used car loan?
Eligibility criteria include being at least 18 years old, having a stable income, a good credit score, and proof of employment history.
What interest rates and fees should I expect with a used car loan?
Interest rates range from 13% to 18%. Expect processing fees, documentation charges, potential prepayment penalties, and late payment fees.
Apply Now For New Car Loan | Used Car Loan | Car Loan Refinance | Loan against Car with us.
Important Terms & Conditions
For example, if you take a loan of Rs. 7 lakhs at the rate of 9.45% with a repayment tenure of 5 years, your EMI will be Rs. 14,638. The total payable amount at the end of 5 years would be Rs. 8,78,280. Therefore, you are paying a total interest amount to the tune of Rs. 1,78,280. This, however, excludes other applicable charges which can be quantified as under: Loan Processing Charge @ 2% = Rs. 14,000, Car Valuation Charges = Rs. 260 per lac, Documentation Charges = Rs. 500, Amortization Schedule Charges = Rs. 200.
Aviirafinserv.com services are free of cost. We do not charge any fee from any of our customers. Loans are originated, booked, and serviced by our partner Banks/NBFCs. Subject to credit appraisal at the sole discretion of our partner Banks/NBFCs and terms & conditions as agreed under the individual loan agreement. Our Partner Banks and NBFCs don’t offer personal loans that require repayment in full within 60 days or less from the date the loan is issued. Subject to the necessary KYC and verification. In case of change of payment mode or swapping your Post Dated Cheques, additional charges are applicable. Also, depending upon the lender bank, prepayment options may or may not be available and the applicable charges may vary accordingly.
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