Due to their appealing interest rates and the possibility to repay the loan in a modest amount over a certain length of time, used car loan has gained a lot of popularity among consumers. Earlier, to get the car of your dreams, you had to set a financial plan and then save in accordance with it. But things have changed, and today a lot of banks and other lending companies provide loans that can easily assist you in getting financing for your car.
Given the presence of security, the used car loan interest rates are quite cheap compared to other types of loans. We have provided complete information on the used auto loan interest rate, eligibility conditions, and application procedure to make the process easier for you.
What Is a Used Car Loan?
A used car loan is a type of secured loan that anyone can take to buy a second-hand car. This loan helps you to cover the price of your car by dividing them into monthly instalments known as EMI. The used car loan interest rates are comparatively lower than personal loans as they are secured by collateral which is your car. The documentation for this car is also very low, and if you have a consistent source of income, you can apply for one at any time.
What Are the Rates of Interest on a Used Car Loan?
Used car loan interest rates are the percentage of the repayment you make to your lender, in addition to the principal amount in EMI. Interest rates on used cars may differ from one lending institution to the next. There are several causes behind this. Here is a list of all the elements that contribute significantly to this discrepancy.
- Down payment and loan size
- Loan period
- Credit history
- The ratio of debt to income
- The car’s age
How to Apply for a Used Car Loan?
The application process for a second-hand car loan is pretty simple. Just follow the steps given below for a hassle-free procedure:
- In your browser, navigate to the used car loan website.
- Before you apply, confirm that you are eligible for the loan.
- To determine your EMI, use the online EMI calculator.
- The “Apply for a Loan” button will appear. Press that and enter all of the required information.
- Then click the “Apply Now” option.
- Your application will be reviewed by management.
- The loan amount will be transferred into your bank account after your loan is approved.
Who Is Eligible to Apply for a Second-Hand Car Loan?
To find out if you qualify for used car loans, review the qualifying requirements listed below:
- You must be a one-year stable Indian resident.
- At least 18 years of age is required.
- There are no monthly income requirements.
- It is required that you work in a firm for at least one year.
- If you are self-employed, you must have been in the business for at least one year.
What Documents Should You Submit While Applying for a Second-Hand Car Loan?
Here is the list of all the necessary documents for a second-hand car loan:
- Fully filled application form
- The vehicle’s registration certificate.
- Submit a Passport/ License/ Birth Driver’s Certificate/ PAN Card as proof of age.
- For identity evidence, use an NREGA Job Card/ Aadhaar Card/ Passport/ Government of India issued picture ID/ Driving license/ Voters ID.
- Aadhaar Card/ Driving License/ Lease or Rent Agreement/ Voter ID Card/ Utility Bill/ Letter from National Population Register with Name and Address Details as Address Proof
- As evidence of business, use a registered lease agreement/ utility bill/ VAT/ Excise/ Service Tax Registration/ Establishment and Shop Registration Certificate/MSME or SSI Registration Certificate.
- As proof of employment for a salaried individual, submit an Appointment Letter/ Salary Slip Joining Date/ ITR/Form 16/ Experience Certificate/ Relieving Certificate.
- As proof of occupation for self-employed individuals, submit a Certificate of Registration for an Establishment and a Shop/ SSI or MSME Registration Certificate/ Sales Tax/ VAT Registration
- For signature proof, a copy of your passport/bank verification/PAN card is required.
- For income evidence, including the most recent salary slips/bank statement/form 16/ITR/audited balance sheet/profit and loss statement.
This is all the information you will need to apply for a used car loan smoothly. Since used car loans are secured loans, applicants with low credit scores also have a good chance of approval at low-interest rates. To get the best-used car loan interest rates to visit sites of numerous lenders and pay attention. To all the elements that affect the interest rates.