How to Get a Loan to Buy a Pre-owned Car?

Many people prefer to buy a pre-owned car instead of a brand-new one. The reasons are twofold. Some people are new drivers and want to avoid scratches or dents on their new car. Others may not have enough money to buy a new car.

However, due to rising prices, even buying a used car can be a costly affair. But there’s a way out – apply for a loan for a pre-owned car.

Here’s how you can apply for a loan for a pre-owned car.

#1 Choose the lender

First, check if a lender can give you a loan for a used car. If they can, ensure the lender can finance the vehicle, you want to purchase. This is because some lenders have an age limit for the vehicle. For instance, some lenders do not finance vehicles older than five years.

After confirming this, see which lender offers the best pre-owned car loan interest rate online. Then compare deals from different lenders for a variety of used cars. Some lenders may let you borrow up to 95% of the car’s value.

#2 Finalise the pre-owned car loan

After you’ve zeroed in on the lender, get details such as the amount you are eligible for, the pre-owned car loan interest rate and the tenure you want. For example, some lenders let you borrow up to Rs 50 lakhs as a loan for a pre-owned car and repay it over 72 months.

However, if you’re unsure which tenure will suit you the best, you can use a used car used car EMI calculator. It will help you pick the tenure that works best for you. Once you decide on that, apply for pre-owned car finance.

#3 Difference between a new car loan and a used car loan

There are several differences between a new car loan and a used car loan. A few of them are:

#1 Loan amount

The loan-to-value ratio is lower with a used car, so the loan amount is low. However, with Tata Capital, you can get up to Rs 50 lakhs for a used car loan.

#2 Interest rates

Since a used car’s loan-to-value ratio is lower, the preowned car loan interest rates are higher.

#3 Loan tenure

The tenure of a new car loan is generally longer than a used car loan. But Tata Capital offers a used car loan with a tenure of up to 6 years.

#4 Documents required

You’ll need to provide some standard documents to get your pre-owned car financed. They are:

#1 Photo id proof

#2 Income proof

#3 Copy of salary slips for the last three months

#4 Address Proof

#5 Copy of Vehicle Registration Certificate

#6 Copy of telephone or mobile bill

#7 Copy of signature along with proof

However, you may need to furnish additional documents as documents required for a loan for a pre-owned car varies depending on your employment.

The Bottom Line

A pre-owned car loan can be an excellent option for those looking to own a vehicle without breaking the bank. At Tata Capital, we offer used car loans at competitive interest rates and with minimal documentation and

Check out our website to learn more!