Considering purchasing a pre-owned car? You’re not alone; reports indicate that more and more Indians, particularly first-time car owners, are considering used/pre-owned cars as personal transportation alternatives for commuting to work and other destinations in light of the COVID-19 outbreak and fears of getting the virus. Personal cleanliness and safety are also major factors driving demand for used cars in India, along with increased comfort and mobility.
While you might already have decided on the used automobile you want, you could also be considering your financing choices. Buyers may easily get used vehicle loans, but for this, you should be aware of a few fundamental guidelines.
Tips on how to apply for a used car loan.
When you apply for a used automobile loan, you must determine your spending plan and determine how quickly you can pay back the loan.
Documentation needed:
Personal documents, including pay stubs, address proof, identity proof with a photo, and phone bills, Vehicle Registration Certificate, Car Documents
Loan eligibility:
Your eligibility for a used automobile loan will depend on a few different variables. They consist of the following:
CIBIL Score-
A high CIBIL score of 750 or above enhances the likelihood that your loan will be approved quickly. The more points you have, the more likely you are to be approved for a loan.
Income Source-
Your chances of obtaining a loan approved will increase if you have a reliable source of income as a salaried or self-employed professional.
Unpaid Loans-
If you have unpaid debt, this may make it more difficult for you to qualify for a used auto loan and may cause the lender to have concerns about your capacity to make payments and past financial stability.
The following loan terms are available to you if all of your paperwork is in order, you have a steady income source, a high CIBIL score, and no outstanding loans:
Repayment terms that are flexible, ranging from 12 to 60 months or longer, at your discretion.
Up to 80% of the value of the used car may be borrowed.
In the case of salaried professionals, the ability to borrow up to 3 times your yearly income and up to 6 times your annual income (in case of self-employed professionals).
