September 29, 2022

Mechanic Escape

Built for the human race

All You Need to Know About Used Car Loan

Used Car Loan: Everything You Need to Know - Spinny Blog

Let’s face it! Purchasing a brand new four-wheeler is still a far-fetched dream for many in India. After all, it is a significant purchase that can quickly drain your life savings. 

Luckily, if you are in this situation, a used car is the affordable alternative for you. Not only can you save money on the market price, but you also get convenient financing options like a used car loan. 

Let’s learn more about used car finance and its advantages below.

Why opt for a used car loan?

Here are a few benefits of borrowing a loan to purchase a used car:

  • Sure, you can apply for a loan to purchase a new car, but borrowing a loan to buy a used car is easier. Why? Because a used car costs less, which means you require a smaller loan amount. Hence, you’ll have to pay smaller EMIs.
  • Many lenders can cover 95 to 100% of your car’s value and offer flexible repayment tenure to make it easier to pay off the loan. 
  • Most leading financial institutions offer competitive used car loan interest rates.
  • You can apply for a used car loan online with minimal paperwork and enjoy quick approval and processing.

Eligibility criteria for used car finance 

Although the used car loan eligibility terms can vary from lender to lender, these are some of the common conditions put forth by most institutions:

  • Age: The applicant must be between the age of 21 and 65 years.
  • Income: The applicant’s monthly income must be at least Rs. 20,000 (for salaried individuals) and Rs 2 lakhs p.a (for self-employed individuals).
  • Work Stability: The applicant must have a stable employment status for a minimum of one year or a stable business status for at least three years.

Steps to apply for used car finance

Step 1: Choose a suitable car model 

If buying a second-hand car,  go for a vehicle in good condition from a reputed dealership. Plus, make sure that the car variant has a high resale value.

Step 2: Select a credible lender

Next up, compare the interest rates and loan schemes offered by different lenders before you pick one. Check the additional charges and utilise a used car loan EMI calculator to understand your EMIs. 

Step 3: Apply online

Apply for the loan online as it is convenient and quick. Upload the documents online and wait for the next steps.

Step 4: Verify documents 

Lastly, the lender will cross-check the documents you uploaded online and determine your eligibility. Once approved, your loan will be sanctioned, and you will receive the respective amount in 2-3 days. 

In a nutshell

If you are struggling to afford a new car, consider a pre-owned one. This way, you can keep your savings intact, and make the most of used car finance options to fund this purchase. But before you apply, do use a used car loan EMI calculator to understand your projected EMIs so you can plan for them on time.

What’s more, many reputed lending institutions offer these loans to help you become a proud car owner!