Due to the increased prices of cars in India, purchasing a brand-new car might be difficult for individuals with limited income. In such a scenario, the best option is to go for a Used Car Loan to fulfil the dream of owning a four-wheeler. These loans come with many benefits and serve as a useful way to finance a car. Read this blog to learn about the top reasons to apply for a Used Car Loan in India.
What exactly is a Used Car Loan?
Buying a car in India is made easier with financial tools like Used Car Loan EMI Calculator. It means that you are obtaining a loan for a used car or a second-hand car and paying EMI on it. rather than paying the full price upfront when purchasing a car in India, you are just repaying in EMIs.
This type of loan eases the stress of buying a new one from a showroom and makes it more manageable when you can’t pay a large sum of money.
Why Apply For a Used Car Loan in India
Benefits of applying for a loan for a used car:
- Minimises The Financial Burden
Typically, purchasing a luxury automobile requires a substantial financial investment that may eventually jeopardise your savings and other financial objectives. Used Car Loans help make automobile ownership easier in this situation. Anyone may realise their ambition of owning an automobile by using this loan to purchase one.
- Loans up to 100% of The Offer Amount
If your plan is to buy a car up to Rs. 9 Lakh, you can easily apply for a loan from banks like ICICI Bank which offers loans up to 100% of the offer amount that eases your financial burden. This counts as a primary benefit of opting for a Used Car Loan.
- Repayment Tenure
The duration for repaying Used Car Loans in India usually falls between 1 to 7 years. You can select the repayment period according to your comfort level with the instalment amount. If you lean towards settling the loan and can manage higher EMIs, a shorter tenure could be more suitable. On the other hand, opting for a longer tenure means lower EMIs that offer more flexibility within your monthly budget.
- Buy Popular Car Model
You can buy your preferred car models at a favourable interest rate which reduces the overall loan repayment cost. Many popular models like the Maruti Swift or Honda City tend to draw in offers of affordable interest rates and lower fees for processing loan applications.
- Flexible Rate of Interest
You have a choice that lets you pick a loan that matches what you can afford to pay back each month. The interest rates for these loans are usually lower and flexible but can vary as per lender. However, having a good credit score and history can help you secure low interest rates. It empowers you to evaluate your financial requirements and opt for an affordable loan that aligns with your financial strategy.
Who Can Apply For a Used Car Loan
| Eligibility Criteria | Self-Employed Individuals | Salaried Individuals |
| Residency | Resident Indians only | Resident & Non-Resident Indians |
| Age Requirement | Between 23 – 60 years | Between 21 – 54 years |
| Professional Experience | Minimum 4 years of business continuity | Minimum 2 years of work experience |
| Minimum Annual Income | Rs. 1.75 Lakh per annum | Rs. 2 Lakh per annum |
Documents Required For The Loan
| Document Type | Required Documents |
| Identity Proof | Aadhar Card, PAN Card, Driving Licence, or Passport |
| Address Proof | Utility Bills, Aadhar Card, PAN Card, or Passport |
| Income Proof | ITR for self-employed individuals; Salary Slips/Form 16 for salaried individuals |
| Bank Statements | Recent bank statements with valid signature |
| Photographs | Passport-sized photographs |
| Business Ownership/Stability Proof | Proof of business ownership or stability (for self-employed individuals) |
| Employment Experience | Employment experience document (for salaried individuals) |
| Partnership Deed & Authorisation | Partnership deed and letter signed by all partners authorising one partner as the vehicle owner (for partnerships) |
Conclusion
If you want to buy a car but within a budget, going for a second-hand car which you can finance with a Used Car Loan is a wise financial decision. You can spread out the expense over a variety of flexible payback options that suit your spending plan. In this manner, you may drive the automobile of your dreams without having to pay a large sum upfront. Owning a car in India may be made reasonable and comfortable by selecting reputable lending institutions like ICICI Bank.