Are you planning to get a vehicle? You can even opt for a second-hand car. It can be seen that there is a trend of buying second-hand cars. Moreover, it is much easier for buyers to get finance from various lenders to get their dream car.
Second-hand car loan:
A second-hand car loan refers to the finance option for buying a second-hand car with ease. These types of loan options are provided by financial bodies such as banks and other kinds of NBFC (Non-banking financial companies). The loan amount is paid out according to the second-hand car’s market value, and then the borrower can pay the loan in different instalments, including the interest.
How to be eligible for a second-hand car loan?
#1 Age factor:
It is important for the buyer to be minimum of 21 years of age and maximum the buyer can be is 60 years of age.
#2 Income criteria:
It is necessary for the buyer to have a stable income source to get second hand car loan easily. Moreover, the amount of income requirement entirely depends on the loan lenders, mostly ₹ 2.5 lakhs per annum, to be eligible for applying for a loan.
#3 Employment is another important criterion:
It is important for the buyer to be employed for a second-hand loan. The buyer can have a regular income or a stable business.
#4 Credit score criteria:
It is also necessary to have a good credit score for getting a second-hand loan (mostly it must be 750+). If the buyer has a better credit score, then he can easily negotiate for the interest rate while getting a second-hand car loan.
#5 Residency criteria:
It is important for the buyer to be a resident of India to be qualified for a second-hand car loan. The buyer must have an address proof to furnish while applying for the loan.
#6 Vehicle age is also an important criterion:
It is also impossible to know the vehicle’s age for getting a second-hand car loan. The majority of the loan lenders are under the category of financing for cars that are up to 10 years old.
#7 Present condition of the car also matters:
The condition of the car and its market value play an important role in assessing the amount of loan the buyer can get.
Important Documents Needed for Getting a Second-hand Car Loan:
#1 Identity proof is a must:
It is vital for the buyer to furnish identity proof that includes a passport, Aadhaar card, or a driving license to be eligible for a second-hand car loan.
#2 Address proof:
It includes details such as utility bills, rent agreements, or any bank statements, which also work.
#3 Income proof is also a mandate:
It includes details such as income tax returns, Form 16, or salary slips.
#4 Employment proof is also needed:
It includes the proof, such as an offer letter, employment certificate, or appointment letter, provided by the employer.
#5 Vehicle papers:
It includes details such as the insurance certificate, registration certificate, and pollution certificate of the car.
#6 Valuation report:
It is crucial for the buyer to get a valuation report that is provided by a certified valuer for evaluating the market value of the second-hand car.
Conclusion:
A second-hand car loan is a cost-effective way to have a vehicle while reducing your upfront costs. If you meet the eligibility requirements, have a good credit score, and provide the correct documentation, your chance of being approved for a loan is quite high. Reputable financial institutions like Mahindra Finance also offer flexible repayment options, allowing used car ownership to be affordable, convenient, and straightforward.
