Owning a car is a significant milestone, but the high cost of brand-new vehicles may prove to be a barrier for some. Fortunately, buying a second-hand car is an economical alternative. The next question that often arises is, "Can I get a loan for a second-hand car?" The answer is Yes.
Loan amount and tenure for used cars
Depending on your eligibility, a lender can offer up to 80% of the vehicle's valuation as second-hand car finance. Axis Bank offers up to 95% of the car's value for second-hand cars as a Car Loan, if it is a purchase and up to 85% if it is a refinancing loan. Most lenders offer such loans for tenures up to 5 years.
You can opt for a shorter tenure to repay the loan sooner, but remember that a shorter tenure will increase the EMI amount. So, make sure that you select a loan amount and tenure to generate an EMI you can easily afford.
Eligibility criteria for Used Car Loans
Every lender has their own eligibility criteria for approving loan applications. These generally include monthly income, occupation, work experience, credit score and age. You can also use eligibility calculators available online for calculating how much your loan EMI would be.
You can check the eligibility requirements to avail a Used Car Loan from Axis Bank. Additionally, you can calculate your monthly EMI using the bank's Car Loan EMI Calculator.
Documentation required for a Used Car Loan
Most lenders will require you to submit at least your ID, address and income proofs. You’ll be required to submit these documents along with a loan application form online or offline.
Additional charges to consider
Apart from the second-hand Car Loan interest rate, you should also check the additional charges applicable on the loan. Most banks require you to pay a few different fees, such as loan processing fees, documentation charges, credit report charges and registration certificate collection charges.
There are also charges for prepayment, cheque bounce, amortisation schedule, duplicate NOC and loan cancellation. Ensure that you check these charges thoroughly before signing the loan documents.
Also Read: Understanding 6 key differences between New Car and Used Car Loans
Conclusion
So, can a second-hand car be financed? The answer is a definitive Yes! With numerous financial institutions offering tailored Used Car Loans, owning a second-hand car has never been more accessible. From lower purchase prices to slower depreciation and affordable insurance premiums, the advantages are numerous. Ensure you meet the eligibility criteria, have the necessary documents ready, and choose a lender that offers competitive Car Loan interest rates.
Axis Bank checks the car’s age and discontinuation status, recommending that the car’s age and loan tenure combined do not exceed 8 to 10 years. If you select a relatively newer car model, not more than 2 to 3 years old, the chances of your obtaining a loan may improve. With Axis Bank's Used Car Loan, you’ll be driving your dream car home in no time.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
