Used Car Loan

Used Car Loan

  • What is Used Car Loan?
    • Used car loan is a type of loan that is given for second hand cars.
    • It is very popular these days.
    • This has grown due to the establishment of many used car dealership in the country.
    • One thing that you need to make sure while buying a used car from a private dealer that the car is not a stolen one.
    • Therefore make sure to buy a second hand car from a reputed auto dealer.
    • When you buy a second hand car you can use a costly car at a much lower price.
    • A loan on used car is transparent, hassle-free and a simple loan.
    • It is passed more quickly as compared to the used car loan.
    • The repayment tenures for used car loan is flexible and the funding can be up to 90% of the car’s valuation.
    • A loan on a used car is approved instantly.
    • The application process for a used car loan is a simple one.
    • The EMIs for used car loans are paid through cheques, Electronic Clearing Service, etc.
    • The tenure for repaying the used car loan ranges from 1 years to 5 years.
used car loan

Eligibility Criteria For Used Car Loan

The following list is a Generalised view on the commonly expected requirements that form the basic eligibility criteria for second hand car loans. Banks, at their own discretion, may require additional proof and/or documentation to establish your eligibility for the said loan.

  • The age of the applicant should be at least 21 years and at most 65 years.
  • The person should be a salaried, self-employed, should hold a property or a partnership firm, a public sector undertaking, a private company.
  • The person can also be currently employed in the agricultural sector or dependent industries.
  • If you want to be qualified for a used car loan, make sure that you and your co-applicant should not have an annual income lesser than 3 lakhs.
  • If the person has a property, is a self-employed individual or has a partnership firm, then the net profit or the total taxable income of the applicant and the co-applicant should not be lesser than 4 lakhs per annum.
  • If the individual is an agriculturist then the net annual income of the applicant or the co-applicant should not be lesser than 4 lakhs per annum in order to get a used car on finance.
  • The hassles are less and the features are more. There are lots of features a rebate associated with the second hand car loan. The hassle associated with it is half the usual hassle.
  • The cost of a second hand car loan is less than a normal car loan. The pre-owned car loan that finances it is lesser as compared to the new-car alternative.
  • The monthly installments associated with the second hand car on finance are less as compare to the car loan for a new car.
  • In the case of used car loans the choice of the model is not dependent on the current on road price.
  • The prospect of deprecation in second hand cars is less as compared to the original cars.
  • This means that you can retain the original value of the car when you resell it in the future.
  • The cost of insurance of a second-hand car loan is lesser as compared to a new car.

The funds offered by a bank or a used car loan are less as compared to a new car loan.

Most of the car loan second hand offer a pre-payment option with a very less penalty.

The used car loan interest rate is greater as compared to a new car loan.

The interest rates offered by some of the banks are as follows:

  • HDFC Bank:
  1. For 60 months: 15.25% to 17.75%
  2. For 48 months: 15.25% to 17.75%
  3. For 36 months: 15.25% to 17.75%
  4. For 24 months: 15.25% to 17.75%
  5. For up to 12 months: 15.25% to 18.25%
  6. Corporate rates: 13.50% to 14.25%
  • State bank of India:
  1. For up to 36 months: 17.25%
  2. Above 36 months: 17.50%
  • Bank of India: 45% for up to 3 years
  • ICICI Bank:75% to 17%
  • Kotak Mahindra Bank: 17% to 20%
  • Federal Bank:45% to 15.95%
  • Axis Bank:50% to 18%
  • The refinancing of automobiles is done by paying off an existing loan with a new loan.
  • Refinancing is done to lower the amount that is paid on a monthly basis.
  • This is done by lowering the interest rate or by extending the loan payment period.

Sometimes the car loan borrower can also add someone’s name or remove someone’s name from the car loan.

Documents required for the used car loan are as follows:

  • A photo identity proof that can be a photo copy of your Voter ID/Passport/Driving License/Aadhar Card/PAN card.
  • A proof telephonic or mobile connection that can be a copy of your telephone or mobile bill.
  • A copy of your vehicle’s registration certificate.
  • A copy of your salary account bank statements for the last three months.
  • A copy of your salary slips for the last three months
  • A copy of your ration card, electricity bill or Passport for your address proof.
  • How much amount is granted for second hand car loan?

An amount of 80%-100% of the used car’s on road price is granted.

  • Do I need to a guarantor while applying for a used car loan?

Most of the banks do not require a guarantor for second hand car finance but may ask for a co-applicant if your income does not match the set eligibility criteria.

  • Am I required to make a down payment in order to avail a used car loan?

Some lenders ask for a down payment in order to avail a used car loan. Many lenders offer financing of up to 100% which means that you do not need to make any down payment.

  • Am I going to be charged for prepaying a used car loan?

A lot of lenders are going to charge you with a penalty fee for prepaying your loan except for Bank of India, Tata Capital, United Bank of India and Indiabulls who do not charge any penalty on the prepayment.

  • Can I avail a used car loan with a low credit score?

Before giving you a loan a lender looks at your credit history to see your repayment capabilities.

Most of the lenders offer a loan on the used car to you when you have a credit score of 750 or more.

  • Can I get a prepaid loan on my existing car?

Yes it is possible to get a used car loan on the existing car. One of such lenders is Tata Capital who offers up to 120% of the car’s current value in the form of cash.

You can up to 20 lakh rupees under this facility.

  • Do I need a collateral or security in order to avail a used car loan?

No it is not required for you to produce any collateral or security for used car loan.

  • Is there a restriction of any sort on the type of car purchases that I can make with the used car loan?

There is no restriction on the type of car that you want to buy. You can buy any type of car with the used car loan.

You as a lender need to check for the age of the car.

  • What is the maximum repayment tenure I can have for a used car loan?

The maximum tenure offered for a used car loan is 84 months or 7 years.

It is however always recommended to choose the shortest tenure period for repayment of the loan else you will have to pay higher rates of interest.

  • How can I repay the availed used car loan?

The different ways to repay the availed used car loan are by direct debit, Electronic Clearing Service and postdated cheques.

Almost most of the lenders offer repayment through any of these ways.

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Used Car Loan

  • What is Used Car Loan?
  • Used car loan is a type of loan that is given for second hand cars.
  • It is very popular these days.
  • This has grown due to the establishment of many used car dealership in the country.
  • One thing that you need to make sure while buying a used car from a private dealer that the car is not a stolen one.
  • Therefore make sure to buy a second hand car from a reputed auto dealer.
  • When you buy a second hand car you can use a costly car at a much lower price.
  • A loan on used car is transparent, hassle-free and a simple loan.
  • It is passed more quickly as compared to the used car loan.
  • The repayment tenures for used car loan is flexible and the funding can be up to 90% of the car’s valuation.
  • A loan on a used car is approved instantly.
  • The application process for a used car loan is a simple one.
  • The EMIs for used car loans are paid through cheques, Electronic Clearing Service, etc.
  • The tenure for repaying the used car loan ranges from 1 years to 5 years.
used car loan

Eligibility Criteria for Used Car Loans

The following list is a Generalised view on the commonly expected requirements that form the basic eligibility criteria for second hand car loans. Banks, at their own discretion, may require additional proof and/or documentation to establish your eligibility for the said loan.

  • The age of the applicant should be at least 21 years and at most 65 years.
  • The person should be a salaried, self-employed, should hold a property or a partnership firm, a public sector undertaking, a private company.
  • The person can also be currently employed in the agricultural sector or dependent industries.
  • If you want to be qualified for a used car loan, make sure that you and your co-applicant should not have an annual income lesser than 3 lakhs.
  • If the person has a property, is a self-employed individual or has a partnership firm, then the net profit or the total taxable income of the applicant and the co-applicant should not be lesser than 4 lakhs per annum.
  • If the individual is an agriculturist then the net annual income of the applicant or the co-applicant should not be lesser than 4 lakhs per annum in order to get a used car on finance.
  • The hassles are less and the features are more. There are lots of features a rebate associated with the second hand car loan. The hassle associated with it is half the usual hassle.
  • The cost of a second hand car loan is less than a normal car loan. The pre-owned car loan that finances it is lesser as compared to the new-car alternative.
  • The monthly installments associated with the second hand car on finance are less as compare to the car loan for a new car.
  • In the case of used car loans the choice of the model is not dependent on the current on road price.
  • The prospect of deprecation in second hand cars is less as compared to the original cars.
  • This means that you can retain the original value of the car when you resell it in the future.

The cost of insurance of a second-hand car loan is lesser as compared to a new car.

The funds offered by a bank or a used car loan are less as compared to a new car loan.

Most of the car loan second hand offer a pre-payment option with a very less penalty.

The used car loan interest rate is greater as compared to a new car loan.

The interest rates offered by some of the banks are as follows:

  • HDFC Bank:
  1. For 60 months: 15.25% to 17.75%
  2. For 48 months: 15.25% to 17.75%
  3. For 36 months: 15.25% to 17.75%
  4. For 24 months: 15.25% to 17.75%
  5. For up to 12 months: 15.25% to 18.25%
  6. Corporate rates: 13.50% to 14.25%
  • State bank of India:
  1. For up to 36 months: 17.25%
  2. Above 36 months: 17.50%
  • Bank of India: 45% for up to 3 years
  • ICICI Bank:75% to 17%
  • Kotak Mahindra Bank: 17% to 20%
  • Federal Bank:45% to 15.95%
  • Axis Bank:50% to 18%
  • The refinancing of automobiles is done by paying off an existing loan with a new loan.
  • Refinancing is done to lower the amount that is paid on a monthly basis.
  • This is done by lowering the interest rate or by extending the loan payment period.

Sometimes the car loan borrower can also add someone’s name or remove someone’s name from the car loan

Documents required for the used car loan are as follows:

  • A photo identity proof that can be a photo copy of your Voter ID/Passport/Driving License/Aadhar Card/PAN card.
  • A proof telephonic or mobile connection that can be a copy of your telephone or mobile bill.
  • A copy of your vehicle’s registration certificate.
  • A copy of your salary account bank statements for the last three months.
  • A copy of your salary slips for the last three months

A copy of your ration card, electricity bill or Passport for your address proof.

  • How much amount is granted for second hand car loan?

An amount of 80%-100% of the used car’s on road price is granted.

  • Do I need to a guarantor while applying for a used car loan?

Most of the banks do not require a guarantor for second hand car finance but may ask for a co-applicant if your income does not match the set eligibility criteria.

  • Am I required to make a down payment in order to avail a used car loan?

Some lenders ask for a down payment in order to avail a used car loan. Many lenders offer financing of up to 100% which means that you do not need to make any down payment.

  • Am I going to be charged for prepaying a used car loan?

A lot of lenders are going to charge you with a penalty fee for prepaying your loan except for Bank of India, Tata Capital, United Bank of India and Indiabulls who do not charge any penalty on the prepayment.

  • Can I avail a used car loan with a low credit score?

Before giving you a loan a lender looks at your credit history to see your repayment capabilities.

Most of the lenders offer a loan on the used car to you when you have a credit score of 750 or more.

  • Can I get a prepaid loan on my existing car?

Yes it is possible to get a used car loan on the existing car. One of such lenders is Tata Capital who offers up to 120% of the car’s current value in the form of cash.

You can up to 20 lakh rupees under this facility.

  • Do I need a collateral or security in order to avail a used car loan?

No it is not required for you to produce any collateral or security for used car loan.

  • Is there a restriction of any sort on the type of car purchases that I can make with the used car loan?

There is no restriction on the type of car that you want to buy. You can buy any type of car with the used car loan.

You as a lender need to check for the age of the car.

  • What is the maximum repayment tenure I can have for a used car loan?

The maximum tenure offered for a used car loan is 84 months or 7 years.

It is however always recommended to choose the shortest tenure period for repayment of the loan else you will have to pay higher rates of interest.

  • How can I repay the availed used car loan?

The different ways to repay the availed used car loan are by direct debit, Electronic Clearing Service and postdated cheques.

Almost most of the lenders offer repayment through any of these ways.

 

Instant Loan Approval

Quick Links

Cards

Investments