You can avail car finance to purchase a pre-owned car at interest rates ranging between 9.5% and 17%. The repayment tenure on pre-owned car loans can go up to 7 years and funding of up to 100% of the car’s valuation can be availed. When opting for pre-owned car finance, ensure that the used car you wish to purchase is not more than 5 years old.
|Name of the Bank||Interest Rate (p.a.)||Processing Fees|
|State Bank of India||11.00% to 12.00%||Rs.1,000 to Rs.1,500|
|ICICI Bank||14.25%||2% of the loan amount|
|HDFC Bank||13.75% to 16%||Rs.2,500 to Rs.5,000|
|Axis Bank||14.80% to 16.80%||1% of the loan amount|
|United Bank of India||9.80%||Rs.600 to Rs.11,800|
|Indiabulls Dhani||11.99% onwards||Up to 5% of the loan amount|
The eligibility criteria for pre-owned car finance may vary from lender to lender but the generic ones have been listed below:
|Particulars||Salaried Applicants||Self-employed Applicants|
|Minimum Annual Income||Rs.2.5 lakh||Turnover of Rs.4.5 lakh|
|Occupation Stability||Should be continuously employed for at least 2 years out of which one year should be with the current employer||Should be in the same line of business for at least 3 years|
To avail a pre-owned car finance, you will need to submit the below-given documents:
|Name of the Document||Particulars|
|Application Form||Filled and duly signed|
|Proof of Identity||Passport, Aadhar Card, Driving License, Voter’s ID, PAN Card, etc.|
|Address Proof||Passport, Ration Card, Driving License, Aadhar Card, Electricity Bill, LIC Policy, Voter’s ID, etc.|
|Income Proof||Salary slips, Form 16, Audit sheet, Profit and Loss account, etc.|
|Car Valuation Report|
Answer: If your income does not meet the minimum income criteria, you can include the income of a co-applicant and apply for pre-owned car finance.
Answer: Yes, you can prepay your loan before the end of your loan tenure for which you may have to pay a penalty. The penalty charges will vary from lender to lender. However, there are some lenders who do not charge a penalty for prepaying your used car loan.
Answer: A credit score of above 750 is preferred by most lenders when offering you any kind of loan, including a used car loan. If your score is below this limit, you may find it difficult to get a car loan and even if you do, you may be charged a higher interest rate.
Answer: Though down payment is not a necessity as some lenders offer 100% finance, it is recommended that you make a down payment to reduce your loan liability. Making a higher down payment can also increase your chances to get a car loan at a lower interest rate.
Answer: You can repay your pre-owned car loan through electronic clearing service (ECS), auto-debit, and post-dated cheques.
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