|Name of the Bank||Interest Rate (p.a.)||Processing Fees||Maximum Loan Amount||Repayment Period|
|ICICI Bank||14.25%||2% of the loan amount||Up to 80% of the valuation of the car||Up to 5 years|
|State Bank of India||11% to 12.00%||Rs.1,000 to Rs.1,500||Up to 80% - 85% of the on-road price of the car||Up to 7 years|
|Axis Bank||14.80% to 16.80%||1% of the loan amount or Rs.6,000||Up to 85% for the car’s valuation||Up to 5 years|
|Tata Capital||12.5% onwards||-||Up to Rs.50 lakh||Up to 5 years|
|Bajaj FinServ||-||Up to 4% of the loan amount (inclusive of taxes)||Up to Rs.20 lakh||Up to 5 years|
|HDFC Bank||13.75% to 16%||Rs.2,500 to Rs.5,000||Up to 100% funding||Up to 7 years|
|Mahindra Finance||-||-||Depends on the age of the vehicle||Up to 5 years|
|United Bank of India||9.80%||Rs.600 to Rs.11,800||Up to Rs.40 lakh||Up to 5 years|
|Indiabulls Dhani||11.99% onwards||Up to 5% of the loan amount||Up to Rs.15 lakh||Up to 3 years|
With the used car segment in India poised to become the world’s third largest market by the year 2021, the demand for pre-owned car loans is also expected to grow. Hence, many car financing companies, banks, and lending institutions are now offering used car loans that boast of the below-mentioned features and benefits:
To avail pre-owned car finance, you must fulfill the below-given car loan eligibility criteria:
|Particulars||Salaried Applicants||Businessmen/Self-employed Applicants|
|Age of the Applicant||Between 21 years and 60 years||Between 25 years and 60 years|
|Minimum Income||Rs.15,000 per month||Net profit of Rs.1.5 lakh p.a.|
|Income Status||At least 1 year of continuous employment||Should have been in the same line of business for at least 3 years|
|Age of the Vehicle||Less than 10 years at the time of loan maturity|
Please note that the eligibility criteria may vary from lender to lender and hence, it is a good idea to check for the same with the respective lenders.
Applicants of used car loans need to furnish the below-given documents:
|Application Form||Filled and duly signed|
|Proof of Identity||Aadhar Card, Passport, 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.|
|Proof of Income||Salary slip, Form 16, Audit sheet, Profit and Loss account, etc.|
|Car Valuation Report|
Lending institutions across the country offer online and offline methods to apply for a pre-owned car loans. Here is a brief description of both the processes.
Easy steps to apply for a Used Car Loan Online
Easy steps to apply for a Used Car Loan Offline
Some of the important things that you must complete when buying a new car are mentioned below:
It is vital that all relevant documents such as the registration certificate and insurance copy are checked thoroughly. Check if the chassis number and engine number is the same as the ones mentioned on the registration copy. It is also important to check the insurance papers carefully to see if the car has had any accidents.
Yes, you can apply for a loan to purchase a second-hand car with a co-applicant, but this is necessary only when your income does not meet the minimum income eligibility criteria. In such instances, your spouse or a relative who resides in the same address as you can be the co-applicant.
Some lenders will ask you to make a down payment when you avail a used car loan. However, many lenders will offer up to 100% financing which means you do not need to make any down payment.
Yes, many lenders will charge you a penalty fee for prepaying your loan except for a few such as Indiabulls, United Bank of India, and Tata Capital who do not levy any penalty on prepayment.
Yes. There are some lenders who will allow you to avail a used car loan on your existing car. One such lender is Tata Capital which will offer up to 120% of your car’s current value as cash. You can avail up to Rs.20 lakh under this facility.
There are various ways through which you can repay your used car loan. They are direct debit, Electronic Clearing Service (ECS), and post-dated cheques (PDCs). Almost all lenders will allow repayment through any one of these ways.
Some loan offerings may include registration charges, but not the insurance charges. Insurance charges will need to be paid by the borrower upfront.
Before any lender offers you a loan, they will first look at your credit history to evaluate your repayment capabilities. Most lenders will offer you a loan only when your credit score is 750 and above. So, if you feel that your credit score is low, first confirm it by checking your score on the BankBazaar website. Once you check your score, you can take corrective measures to enhance it and then apply for a loan.
No, you do not have to provide any security or collateral to avail a pre-owned car loan as the vehicle itself will be considered as a security. In the event of you defaulting on your EMI payments, the lender has the right to seize your vehicle and recover the loan amount.
You can buy any kind of car such as sedans, hatchbacks, sports utility vehicles (SUVs), etc., with used car financing. However, lenders will check for the age of the car before offering you a used car loan.
The maximum repayment tenure offered on pre-owned car loans is 84 months or 7 years which is offered by the State Bank of India (SBI). However, it is always recommended that you choose shorter repayment tenures because you will end up paying higher interest over the loan tenure. Shorter repayment tenures would mean higher EMIs but in the long run, it will help you cut down on the interest payable towards your car loan.
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