There is a higher demand for pre-owned cars as compared to new cars due to several reasons. Some of them include that new learners prefer to hone their driving skills on such pre-owned cars in the pretext of protecting their new cars from dents and scrapes. Also, another reason why used cars are prefered is for the price. A pre-owned car costs almost half the price of the original car just within a year of its use. Moreover, the sector has become organised with several players entering the market and offering a bang for your buck.
Availing a used car loan has further made it easy to buy used cars. Not only banks but non-banking financial companies (NBFCs) too offer credit for a second-hand car loan. The digital revolution in the nation has further made it easy to apply for used car finance within a few clicks.
Let us look at a few pointers that one needs to keep in mind to quicker approval of your used car loan applications-
Know your eligibility
Every loan application requires the applicant to meet certain loan application criteria, and same is the case of a second-hand car loan. Some of the common used car loan eligibility criteria include your age, income, credit score, and the make, model, and age of the vehicle. An online calculator can be used in determining the eligibility and knowing the periodic payments that shall be required towards the used car loan.
Check for available options
With the second-hand car market becoming more organised, there are different dealers with whom you can enquire for the best and the finest car model and make. A word of caution while buying the car directly from the seller is that you may get the car inspected by a trained mechanic. It is done to check for any faults that you need to address on priority and pay the price for it accordingly. Also, your future repairs and replacement costs depend on such inspection.
Be ready with all necessary documents
While applying for used car finance, the financial institutions seek for some basic documents like know-your-customer (KYC) and income proof. A copy of Permanent Account Number (PAN), salary slips (if you are salaried) or return of income (if you are a self-employed professional), bank statement, and residence proof are a few handy documents that are required when you apply for a used car loan. Some financial institutions may even seek the valuers’ report along with your loan application form.
Lastly, one can also have a pre-approved loan facility from their choice of financial institution. Doing so helps the buyer in having a greater bargaining power with the dealer without having to worry about arranging for funds. A pre-approved second-hand car loan facility helps the buyer to know the available budget for their purchase.