All You Need to Know About Used Car Loans
Mohan was planning to buy a car. However, he was thinking of a used car. He wanted to test his driving skills on a used car before getting a new one. Moreover, his finances did not permit him to buy a new car. In fact, even for the used car he wanted to buy, he needed a used car loan. He was not aware of next steps to take.
Here are the features of a used car loan available from banks and financial institutions:
- The Quantum of Loan Available
There is a limit to the amount of loan you can avail to buy a used car. Banks and financial institutions usually lend up to a maximum of 80% of the value of the used car. You are required to pay the remaining 20% of the cost of the car out of your own pockets. Though the available amount of loan varies between different lenders the maximum limit is usually limited to 80% of the car’s cost.
- The Age of the Pre-Owned Car
Another important consideration for a used car loan is the age of the car which you are considering to buy. Lenders usually allow you a loan only if the pre-owned car is not more than 10 years old. The loan is not available for a car more than 10 years old.
- Your Eligibility Criteria
Banks and Non-Banking Financial Companies (NBFCs) have a prescribed eligibility criterion for borrowers. You can avail a used car loan only if you meet the prescribed eligibility criteria. Some common criteria required are:
o Age of the Borrower – there is a minimum and a maximum age limit for availing a used car loan. You should be at least 21 years of age to apply for and avail a used car loan. The maximum age for the repayment of the loan is, usually, 65 years.
o Occupation of the Borrower – used car loans are available only to the salaried or self-employed individuals.
o The Current Income Level of the Borrower – your monthly income is also a criterion for a used car loan. Lenders specify a minimum level of monthly income and if your monthly income meets this minimum level you can avail the loan.
- Documents Required
There are various documents which are required to avail a used car loan. These documents include:
o Your age proof like your Voter’s ID Card, Passport, Driving License, etc.
o Your address proof like your electricity bill, phone bill, Passport, etc.
o Your identity proof like your Voter’s ID Card, PAN Card, etc.
o Your bank details (bank statement of your bank account of the last 3 or 6 months)
o Proof of your income (Form 16 or Salary Slips if you are salaried or IT Returns if you are self-employed)
o Your proof of signature
These were the features of a used car loan. To avail a loan to buy a pre-owned car, you can go online and get the loan. The online medium provides you with the facility of used car loan EMI calculator which calculates the EMIs of your used car by taking into account the loan quantum and the used car loan interest rate. Bajaj Finserv also allows Personal Loans for used cars. If you are interested in applying for a Personal Loan from Bajaj Finserv, you can apply online for the same.
Mohan availed a Personal Loan for the used car and bought a car for himself. You can do so yourself. Opt for a used car loan and get a car yourself. What are you waiting for?