Documents Required to Get a Used Car Loan in India

Documents Required to Get a Used Car Loan in India

If you have narrowed down on buying a second-hand car, chances are, you will require a used car loan. And, factors such as income, outstanding loan, credit score, and work stability will affect your loan approval.

For a hassle-free process and affordable used-car loan interest rates, make sure you spend some time researching the ideal lending institution for you.

Eligibility criteria

Check out the eligibility criteria and documents needed to borrow a used car loan in India.

  • The individual has to be in the 21 to 65 age bracket.
  • Salaried individuals must earn at least Rs. 20,000 per month and self-employed individuals Rs. 2 lakhs per year.
  • Self-employed applicants must have a running business for at least three years, and salaried applicants must have a minimum work experience of one year.

Documents required

For verification and credibility check, applicants have to submit a list of documents to their lending institution. Some of the commonly required used car finance documents are:

  • Income proof
  • Salary slips
  • Photo Identity proof
  • Address proof
  • Mobile/telephone bill
  • Vehicle registration certificate
  • Copy of signature with a proof copy

Moreover, the list of documentation for a used car loan has variations for self-employed and salaried individuals. These include:

Self-employed individuals 

  • Applicants signature copy with signature proof
  • Address proof such as bank statements, tax receipt of property, property registration documents, utility bills, or Voter’s ID
  • ITR with profit and loss statements, audited balance sheet, and three months prior banks statements

Self-employed through partnership

  • Three-month bank statements, profit and loss statements, and audited balance sheet as proof of income
  • Proof of business through registered certificate of incorporation/ Partnership Deed of private and public limited companies

Self-employed (other)

  • Ownership certificate, i.e. registered certificate of incorporation/Partnership Deed of private and public limited companies
  • Income proof such as the previous three months’ bank statements, audited balance sheet, ITR documents, and profit and loss statement.

Salaried individuals 

  • Salary slips of the past three months
  • Address proof like electricity bill, ration card, or passport
  • Registration certificate of vehicle

Benefits of used-car finance 

  • Used car loans help ease the financial pressure during the purchase, and since the loan amount is usually low, the EMIs won’t put a strain on your monthly budget.
  • The procedure to apply for the loan is quite simple and can be completed online.
  • Lenders offer adjustable repayment terms and process this loan with minimal paperwork.

In a nutshell

All you have to do is keep the list of required documents ready and up-to-date to proceed with your pre-owned car loan application. Along with these, refer to the used car loan eligibility criteria to understand what is mandatory, and you are good to go.

 

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