Numerous individuals are interested in the used car segment, given the availability of top-quality models in the Indian second-hand car market. Since buying a car is a substantial investment, a used car loan is a good option for prospective car owners.
Acquiring a personal loan from a reputed financial institution can prove to be highly convenient for this purpose. But individuals must be aware of some vital aspects of this credit instrument for acquiring it in a hassle-free manner.
How to apply for a second-hand car loan?
Individuals must carry out the below-mentioned steps to apply for a pre-owned car loan:
Step 1: Enter all necessary details
The process to acquire a personal loan to finance a used car is simple. All a borrower needs to do is visit the website of the concerned financial institution and fill up the application form by providing financial, employment, and personal details.
Step 2: Input the required loan amount and tenor
After filling the application form, individuals must mention their required loan amount and tenor. They can use an online personal loan calculator for determining the appropriate amount and tenor before a loan application. Using this tool to calculate personal loan EMIs will help them efficiently manage the repayments.
Prospective borrowers must note that they can apply for a personal loan amounting up to Rs. 25 lakh at a lucrative interest rate. The loan tenor can also range anywhere from 2 years to 5 years.
Step 3: Submit all necessary personal loan documents
Applicants searching for “how to get a personal loan” must note that they need to undergo a basic documentation procedure to acquire this credit instrument. Some of the documents that individuals must submit are:
- Government-issued KYC documents like Aadhaar, PAN card, voter’s ID card, passport or driving license
- Bank account statement of last few months as specified by the concerned financial institution
- Salary slips of the previous few months as specified by the concerned financial institution
- Employee ID card
After the used car loan is approved, the disbursal of the credit amount is carried out within 24 hours.
What are the eligibility parameters that individuals must fulfill to acquire a second-hand car loan?
Along with the application procedure, individuals must take note of the various eligibility parameters that should be met. Illustrated below are the various eligibility criteria for acquiring a personal loan to buy a used car:
- Must be an Indian resident
- Must possess a CIBIL score of 750 and above
- Must be a salaried individual employed with an MNC, public or private limited organization.
For used car finance, there can be some additional parameters. These include:
- A pre-owned car loan is only available for private vehicles.
- The car must not have over three previous owners.
- Salaried applicants must have a minimum of 1 year of work experience and a monthly salary of at least Rs. 22,000 based on the job location.
- The car must not be over 10 years old when applying for a loan.
- The age of the applicant must be between 21 years to 67 years.
Fees and charges associated with used car finance
Individuals willing to purchase a used car on credit must take note of the various fees and charges associated with the entire procedure. These are listed below:
- Stamp duty
- Rate of interest
- Processing fee
- Loan re-booking
- Documentation charges
- Penalty interest
- Bounce charges
- Legal, repossession and incidental charges
- NDC to convert from private to commercial
- NDC for interstate transfer
- Duplicate NDC
- Charges for getting a physical copy of the statement of account or foreclosure letter or repayment schedule or list of documents or interest certificate
- Mandate rejection charge
- Loan cancellation charges
Besides all these, individuals must ensure they choose a reputed lender while acquiring a personal loan for purchasing a used car. This will open doors to several attractive offers and facilities, including several pre-approved offers extended on both secured and unsecured financial products. These offers will help simplify and accelerate the lending process. Individuals can check their pre-approved offers by providing details, such as their name and contact number.
Some reputed financial institutions like Bajaj Finserv also extend a Flexi loan facility that makes the repayment of loan amounts more convenient. Through this facility, individuals need to pay the personal loan interest as equated monthly installments with the principal amount to be paid at the end of the tenor.
While choosing the lender, prospective borrowers must go for the one offering the most suitable interest rate. Using a personal loan calculator can help them make an informed decision.