Used Car Loans: All That You Need To Know
Last Modified: 18-May-2022
A car is a necessity in today’s world, where commuting becomes a significant investment in terms of time, energy, and money. The used car or pre-owned car market in India is booming, and people no longer hesitate to purchase used cars or second-hand cars, especially with the availability of used car loans by Muthoot Capital. Loans for used cars can be availed at attractive interest rates and flexible repayment tenures.
What is a Used Car Loan?
As the name suggests, a used car loan or a second-hand car loan is a car loan that one can avail to buy a second-hand/used car. The loan approval will depend on the age and condition of the car as well as its IDV (Insurer Declared Value) which is the valuation done by the lender.
These loans are available at varying tenures from one to five years, up to 95% of the car’s value.
Benefits of a Loan for Used Cars
- Used cars cost less than brand-new cars. As a result, your EMIs will also be smaller and more affordable.
- Used car loans generally come with repayment options that are flexible and range from 12 to 60 months.
- You can get up to 95% of the IDV of your car value. (*Subject to criteria)
- Used car loans are convenient, affordable, and easy to avail.
- These loans come with attractive interest rates and special schemes as per your needs.
- Apply for a used car loan online for quick approval with minimum documentation.
- Get a loan under various income categories: income base, no income base, and asset proof base.
- These loans allow low down payments and affordable EMI schemes to suit your financial requirements.
Standard Used Car Loan Eligibility Conditions
It is imperative to check whether you are eligible to apply for a loan for a used car loan to avoid rejection of your used car loan application.
Here is a list of standard criteria for eligibility:
The applicant’s age must be between 21 and 65 years.
- The minimum salary for a salaried employee should be a monthly income of at least Rs. 15,000.
- Self-employed individuals should have an annual income of a minimum of Rs. 1.5 lakhs
- Steady employment status for salaried persons for at least 1 year
- Stable business for Self-employed individuals for at least 3 years in succession
Documents Required for Used Car Loan Application
Submit the following documents with your loan application.
- Valid Proof of identity: Any one PAN Card/Passport/Aadhaar Card/Voter Id/Driving License
- Valid Proof of Address: Any one of Passport/Aadhaar Card/Voter Id/Driving License /Electricity or Utility Bill/Ration Card/ LIC Policy
- Proof of Income: Bank statement showing salary credit/ Pay Slips/ ITR/Form 16
- Asset Proof: Latest receipt for land or building or house tax
- Passport size photographs of the applicant
Used Car Loan Fees & Charges
When applying for a used car loan, understand that it comes with some processing and other charges apart from the interest. Below we discuss some of these charges.
There is a nominal, one-time loan processing fee charged on the loan amount. It is a non-refundable charge.
Various other charges related to the documentation and processing of the loan are also charged, such as charges for documentation, stamp duty registration certificate collection, amortization charges, etc.
Loan Pre-Payment or Foreclosure Charge:
In case you plan to repay the loan before its due date, you need to pay a nominal charge for pre-paying the loan or foreclosure to compensate for the loss of interest for the lender.
Muthoot Capital provides affordable and accessible second-hand car loans up to 95% of the car’s value and ranging from Rs. 50,000 to 10 Lakhs. Get easy repayment tenures up to 60 months at attractive interest rates. Get in touch with us to find out more about used car loans.