APPLICABLE INTEREST RATES FOR USED CAR LOAN :

Used car loans are basically the loan that you take for purchasing a second hand or a pre-owned car. Generally, the maximum tenure of the loan for the used vehicles may range from 10.50% and 8.9 for the floating rates. In addition, the maximum loan tenure for pre-owned may range up to 5 years. Here we will talk about the interest rates for used car loan. You can avail a used car loan at either a floating and fixed interest rate. Therefore you can make use of exciting offers by applying for a used car loan through various banks.

Down below, the interest rates for Used Car Loan in India are:

HDFC Bank

Fixed – 13.00%

Rs.2,275 for a tenure of 5 years

80% of total market value

SBI Car Loan

Floating – 12.60%

Rs.1,798 for a tenure of 7 years

85% of the total on-road price

Kotak Bank

Fixed – 17.00%

Rs.2,485 for a tenure of 5 years

90% of the total market value

ICICI Bank

Fixed – 10.50%

Rs.2,149 for a tenure of 5 years

80% of the total market value

Union Bank of India

Floating – 11.85%

Rs.2,217 for a tenure of 5 years

50% of the total market value

Punjab National Bank

Floating – 11.20%

Rs.2,184 for a tenure of 5 years

70% of the total market value

Central Bank of India

Floating – 9.95%

Rs.2,122 for a tenure of 5 years

75% of the total market value

 

There are some factors that affect loan interest in India:

 

  • Credit history– In case of determining your loan interest, Credit history plays an integral role in the used car finance. Thus,  it is always advisable to have a credit score of 750 and above in order to receive a lower interest rate.
  • Level of income– A lower amount of debt-to-income ratio is typically appropriate while availing of a used car finance in India.  Therefore, this means that the lender will not falter in the EMI payments and also he will not delay the same since he or she has a steady source of income with fewer debts.
  • Loan tenure–It is a known fact that longer the loan tenure, lower will be the rate of interest. Therefore, you should opt for a tenure that is best suitable to your financial condition.

In order to apply for a used car loan, you need to have the following documents:

Identity Proof

For Salaried individuals: Identity Proof such as PAN, Passport, Aadhar, Card, Voter Id and an Employee Id issued by the Government of India.

Self-employed: If you are a self-employed individual, you must have your Passport, PAN Card, Driving License and Sales Tax Registration Certificate

Address Proof

Passport, Telephone bill, Lease Agreement, Utility Bill and Bank Statement. Address Proof requirement for salaried and self-employed buyers are the same.

Income Proof

For the Salaried Class: Latest 3 to 6-month salary slip and form 16 / IT return

For the self-employed: Income Tax returns for the past 2 years. You will need it with the Balance sheet as well as P & L A/C, computation of income. If the ITR is audited than the audited report along with the annexures are also required

The document is indicative and the sales representative will provide further details upon the meeting.

BENEFITS AND FEATURES OF USED CAR FINANCE

A used car loan is quite ideal for you if you have been eyeing on buying a luxurious car but you have not been able to afford it. Or, maybe, you do not mind using a pre-owned car as long as it is in good condition. With the pre-owned car market in India rising to an extent, the dealers make sure that the car they sell is properly verified and are also in good condition. These emerging markets are encouraging more and more people to purchase used cars. Also, many top banks out there and also some financial institutions in the country are offering a number of used car finance at attractive interest rates.

There are various advantages of availing used car finance. They are:

  • The lower cost:

The cost of the used car or the pre-owned car will be, of course, much lower than that of the new cars out there. This eventually means that the cost of insurance will also be reduced. Thus, you can have a luxury car by availing a used car loan as the used cars are relatively much cheaper than the new ones.

  • Lower borrowing amount:

In the case of a pre-owned or used car loan, the borrowing amount will be relatively lower. It goes without saying that if the purchasing amount of the car is low, the borrowing amount will be certainly lower as compared to the new car loans. 

  • Flexible repayment terms:

Also, in case of applying for a used car loan, the repayment terms will be quite flexible. Generally, you will get to have a loan tenure of about 60 months for making the repayment of the loan.

  • Maximum valuation of the car:

You can avail of various used car loans and can get finance up to 90% of the actual car valuation. That means that you can purchase the car by adding just a little amount of money from your pocket. And then the rest you can cover by the loan amount.

  • Hassle-free application :

Today, since everything is digitized, you can avail the loan within a matter of few minutes just by surfing on the net for a while and by entering some personal details and information as per the requirements. The used car loan application process is quite fast and involves no hassle.

WHAT IS USED CAR LOAN & Eligibility Criteria For it

A used car loan is the type of loan that you take to buy a used or a second-hand car. These type car loans enable you to get a loan for buying a pre-owned or a used car at relatively lower interest rates. There are many banks out there who are quite great players in the pre-owned car loan. Some banks, also provide up to 100% finance for the used cars, with easy, simple and hassle-free processing, the instant disbursal and minimum documentation.

In the case of a used car loan, the cost of a used car will be much lower than that of a new car. It means that the cost of insurance will also decrease. In addition to this, in a used car loan, the borrowing amount will be lower and the terms of repayment will be flexible. You can have a tenure of around 60 months for the repayment of the loan. 

Before applying for any loan, you first need to accomplish some sets of eligibility criteria. 

Salaried Individuals:

  • This category may include the doctors, CAs, or the employees of various private limited companies, employees from different public sector undertakings, including central, state and also the local bodies
  • For applying for a used car loan, you need to be an individual minimum of 21 years of age at the time of applying for the loan, and certainly not older than 60 at the end of the loan tenure.
  • Also, you need to have a job for at least 2 years, with a minimum of 1 year with the current employer. 
  • If you earn a minimum of Rs. 2,50,000 per year, including the income of the spouse, you are eligible for the loan.

Self Employed Individuals (Sole Proprietorship):

  • This category of eligible applicants of used car loans includes self-employed sole proprietors in the business of manufacturing, services or trades.
  • In this case, you need to be an employee of 25 years of age at the time of your application for the loan, and no older than 65 years at the end of the loan tenure
  • You have to be in business for a minimum of 3 years
  • Also, You should earn at least Rs. 2,50,000 per annum

Self Employed Individuals (Partnership Firms):

  • This category includes the self-employed partners in the business of manufacturing, trading or services
  • Here also, who have to earn at least Rs. 2,50,000 per annum
  • In addition, you need to have a minimum turnover of Rs. 4,50,000 per annum
  • You also need to have a residence or office telephone line. A post-paid mobile phone which is a minimum of three months old is acceptable if only one landline is available.

Self Employed Individuals (Private Limited Companies):

  • This includes those who own a private company in the business of manufacturing, trading or services
  • They should earn a minimum amount of Rs. 2,50,000 per annum
  • In addition, these individuals also need to have an office landline

Self Employed Individuals (Public Limited Companies):

  • This group of eligible applicants includes the directors in public limited companies that are in the business of manufacturing, trading or services
  • This applicant should earn at least Rs. 2,50,000 per annum.
  • Also, these individuals who have an office landline.

Self Employed Individuals (Hindu Undivided Family – HUF):

  • This includes the self-employed individuals in a business who falls under HUF
  • This individual must earn at least Rs. 2,50,000 per annum
  • Individuals also must have a residence and office telephone line. A post-paid mobile phone that is a minimum of three months old will be acceptable if only one landline is available
  • The Karta should be the co-applicant in the individual capacity.