Pre-approved Used Car Loan: Everything You Need to Know

What Are Used Car Loans?

Owning a pre-owned car has become more widespread these days with newer advancements in the making of a car, enabling it to run, look, drive, and last longer than it used to earlier. Second-hand or pre-owned car loans are more affordable in terms of finances and more car buyers are opting for pre-owned cars lately.

Benefits and the quantum of loans usually depend on the lending institution like a bank or an NBFC. Car buyers can find loans approved for pre-owned cars with competitive interest rates and flexible tenures.

There are several factors you must keep in mind before planning to invest in a second-hand car. From knowing the vehicle well to learning if all documents presented are reliable, many steps must be considered before going for a pre-owned car.Most often, loans on pre-owned cars are flexible and easy to avail. The interest rates are low and the rate of approval is high.

Investing in a pre-owned car is a smarter choice today. With all the verification and understanding of the vehicle, it makes more sense to invest in a used car over a new one. You can always buy a better variant at the same price as a new car if you opt to buy a pre-owned car.

Benefits of a Used Car Loan

Despite having a smaller budget, becoming a car owner is now easy if you plan and invest in a used car. Some of the many benefits of a used car loan are given below:

• The application and the rate of approval are quite easy.
• The repayment tenure will be less as the loan amount is less – this helps you save a lot on interest rates.
• You might, more often than not, get 90% or even 100% of the value of the car.
• Buying a pre-owned car will require you to take a smaller amount as a loan, saving a lot of money for you in the long run.

Several banks and NBFCs are flooded across the country to give loans for new and used cars. Portals like Gaadi Bazaar help consumers buy used and pre-owned cars that are certified and verified to avoid unwanted discrepancies.

Documents Needed for Used Car Loans

List of documents required while opting for a pre-owned car loan:

• Identity proof of the applicant
• Recent photographs
• Address proof of the applicant
• Proforma Invoice of the vehicle (if applicable)
• Sale agreement from the seller or the authorized car dealer
• Bank statements (past 6 months at least)
• Income proof (form 16 / ITR for the past year at least)
• Car valuation report
• RC copy of the vehicle
• Insurance copy of the vehicle

What are Pre-approved Used Car Loans?

Pre-approved car loans are ones where a lender or financier considers you eligible for a used car loan before you even apply for one. If you are found to befit the bank’s or lender’s eligibility criteria, they will sanction and disburse the loan amount to you to buy your preferred used car.

Benefits of Getting a Pre-approved Used Car Loan

• Instant fund disbursal
• Minimum or free of documentation
• Maximum funding from the bank
• Flexible repayment tenures

How to Get Pre-Approved for A Car Loan?

Lenders consider a few important factors while determining whether you pre-qualify for used car loans or car loans in general.

• You must be an existing customer of the bank.
• You must repay your credit card bills on time.
• You must consistently maintain a good credit score
• You must maintain adequate funds in your Savings Account and have other reserves and investments like Fixed Deposits with the bank/lender.
• You must avoid using up the entire credit limit on your credit card.
• You must have repaid all your previous loan EMIs on time.

Wrapping Up

A used car loan is an incredible aid that equips you with the relevant and required funds to buy your dream car. Buying a used car is also financially straining for many. This is where used car loans come in handy. You can pay affordable EMIs and own a car easily.

You need to finalize what car you want to buy and arrange the down payment before applying for the used car loan. The lender will then assess your application, and determine your eligibility before sanctioning the loan. These steps are skipped when you get a pre-approved used car loan, making the entire process all too quick and convenient.