As the second hand car segment of the Indian automobile sector keeps expanding at a steady rate, the everyday commuting needs of citizens is being simplified. Consequently, there has also been a similar rise in the demand for second hand vehicle financing options like a used car loan for the vehicle’s purchase.
If you are an aspiring individual planning to purchase a used car, it can be crucial to know all the financing related nuances to select the best vehicle financing option. In this light, we bring you a detailed guide that shall help you better understand your choice for used car financing for better decision-making.
Top Features of Second Hand Car Loans
Leading financial institutions in the market come with the following attractive features to make availing a used car loan favourable for aspiring individuals.
Financing of high value
Lenders provide fairly decent to high-value financing as second hand car loans to eligible individuals. With market leading financial institutions, the loan amount can range between Rs.50,000 and Rs.50 Lakh. The loan amount is provided by lenders mostly for all popular car brands. However, the latest car models are usually preferred to ensure high resale value of the vehicle as per the current market rates.
Competitive rates and charges
Eligible applicants can also receive the loan amount at attractive interest rates and other nominal charges. A reduced interest rate levy increases affordability, enabling loan payoff in easy EMIs and helping improve savings. With high loan eligibility, you can also negotiate with your lender for a reduced rate of interest.
Financing with a high LTV of up to 75%
Popular lenders also provide a high LTV (Loan to Value ratio) of up to 75% of the used car’s current market value as financing. This enables individuals to make convenient purchases with only a small portion of the price paid by them. To better understand, LTV is the maximum percentage of a collateral’s current market value that a lender provides as financing to borrowers.
A long and flexible repayment tenure
These loan options also accompany extended repayment tenures with the flexibility of choice depending on the borrower’s repayment capacity. Some of the loans come with a repayment term of up to 5 years, a long tenure that helps you repay in easy EMIs.
Easy financing with quick approval and disbursal
Almost all lenders in the market have introduced online process for loan applications to complete, not only improving the loan’s access but also making it easier to apply. Further, the loans are also financed quickly if all the eligibility and document requirements are in place. Once approved, disbursal does not involve a long duration too, giving you access to funds in minimum time.
Doorstep services
With the right lender selection, you can also receive financing with their doorstep service for easy document collection. So, you would not need to step out of your home for financing your used car purchase.
Attractive terms of lending for existing or repeat customers
As customer retention is one of the essential lookouts for financial institutions, they usually provide their existing or repeat customers with the best second hand car loan offers in place. These can include the lowest market rates, flexibility of repayment choices, EMI selection as per repayment capacity, etc.
Eligibility and Documentation Requirements for a Used Car Loan
To successfully avail a used car loan, you must also fulfil the eligibility requirements laid down by your selected lender. Fulfilling the eligibility and document requirements optimally improves your chances of quick loan approval.
The standard eligibility criteria to avail a second hand car loan include the following.
- Age must be above 18 years.
- He/she must be a salaried individual with a minimum employment term of 1 year.
- In case of business owners too, the minimum vintage needed is 1 year.
- He/she must also be a resident Indian citizen with minimum 1 year of stability.
The paperwork involves the following documents primarily required.
- KYC documents, including the proofs of identity and address.
- Income documents.
- Bank account statements.
- Passport size photographs.
- Filled up application form.
With all these requirements in place, you can pro proceed to apply for a used car loan to finance your second hand vehicle purchase conveniently. Make sure to run a market comparison of available lenders so you can arrive at the best balance between affordability and features for maximised benefits of financing.
