You may use a loan to finance the second-hand automobile you are buying. Remember, though, that there are a few things to look at before applying for such a loan. For example, inquire about the lender’s willingness to grant a loan for a used automobile. Also, it is important to ask about any possible interest rate and whether there will be any application fees associated with your loan.
- Pay a visit to the lender:
The used car loan is a good option for car owners who want an easy and affordable way to get their used vehicle fixed. However, before applying for a pre-owned car loan, you should be aware of the costs associated with getting your pre-owned automobile fixed. The best way to find out how much it will cost is by checking out the seller’s online marketplace or speaking to somebody at the dealership. If you don’t see any discounts offered on an already fixed vehicle, then it may be worth waiting for one that you can get at wholesale prices.
Interest rates on used car loans to purchase second-hand or pre-owned vehicles are usually lower than those offered by NBFCs. Banks will typically offer up to 80% on loan to value while NBFCs might go up to 100%. This difference in interest rates can be the difference between purchasing a vehicle with lower sunk costs, or paying more in interest.
- Complete the pre-owned vehicle loan:
Determining the loan’s specifics will vary based on your lender and the type of loan you’re qualified for. In general, however, common requirements include how much you can afford, the rate of interest, when payments are expected to be made, and how long the loan lasts. If you think you might prepay or foreclose the debt in part or in full, you should inquire about prepayment fees with your lender.
- What’s the difference between a new and a used vehicle loan?
Used Car Loans for Used Cars have higher interest rates, lower loan-to-value (LTV) ratios, and shorter loan tenures. You can qualified for a used car loan if you need to finance the purchase of a new or used vehicle that is between one and five years old.
- Send in your paperwork:
You may need to provide documentation to complete your loan application. We’ve provided a list of the documents you’ll need to give us.
- Photo identification with evidence of age (like PAN card, Aadhaar card, passport, driver’s license)
- 3 passport-sized photos and a signed application form (Varies Bank to Bank)
- Proof of residence: Valid passport, voter identification card, driver’s licence, postpaid utility bill (gas and electricity bills), updated passbook or bank account statement, notarized and recorded rent agreement
Please ensure that all original paperwork are present with the seller before purchasing a used automobile. If the lender’s hypothecation is noted on the Car Registration Certificate (Car RC), the seller must return the loan, obtain a No Objection Certificate (NOC) from his banker, and share the NOC with you. Please ensure that all original paperwork are present with the seller before purchasing a used automobile.