Used car loan is used to buy a second-hand car. These loans are provided at interesting interest rates and have a repayment tenure of up to five years. There is no need for collateral or security required for a used car loan as the vehicle acts as the security.
Benefits of buying used car loan
- Long repayment tenure.
- Easy documentation and can be completed online.
- The insurance costs and depreciation rates are lower when compared to a new car.
- Lesser outgoing cash flow
- Fast processing and disbursal
Process to apply for used car loan
- Check on lenders
- Finalise the pre-owned car
- Submit the documents
You will have to submit documents to the lender to enable it to process your loan application and can be completed online. Also, you can visit the branch and submit documents physically. These are the lists of documents:
Salaried Employees
- Last 3 months' salary slips
- Income tax returns (ITR) documents or Form 16
Self-employed Individuals
- Computation of income for the last 2 years, balance sheet and profit and loss account,
- ITR documents of the last 2 years
- TDS Certificate (Form 16A) / Income Tax Challans / Form 26 AS for income declared in ITR, Clearance Certificate / IT Assessment.
- Business proof: Service Tax Registration, Registration Certificate, among others
Documents
- Application form
- Passport-size photographs
- Car valuation report
Address proof
You can submit any of the mentioned documents as proof of address:
- Voter’s ID
- LIC Policy
- Electricity Bill
- Aadhaar Card
- Driving License
- Ration Card
- Passport
Identity proof
You can submit any of the mentioned documents as the identity of proof:
- Aadhaar Card
- Passport
- Driving License
- Voter’s ID
- PAN Card
Income proof
You can submit any of the mentioned documents like income proof:
- Profit and loss account
- Balance sheet
- Audit sheet
- Form 16
- Salary slip
- Bank statements
Take possession of your car
Once the loaner approves the loan, the vendor will get the money in his/her bank account within a few hours. You can deposit the down payment amount to the seller and take possession of the pre-owned car.
