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Everything You Need To Know About Personal Loans for Used Cars

  • Highlights

  • Personal loans are a great tool to buy second-hand cars

  • NBFCs offer these loans at reasonable interest rates

  • Avoid common mistakes and see how you can get a good deal

  • Choose a Bajaj Finserv Personal Loan to buy a used vehicle

With the used car market in India on a growth trajectory, chances are that you can find a great deal on a second-hand vehicle. And financial lenders today offer financing at reasonable rates to help you buy a used vehicle with ease.

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But before you choose a personal loan to buy a second hand car, it helps if you understand every aspect of this loan. Let us guide you in your purchase journey with our exhaustive guide on personal loans for used vehicles.

What is a personal loan for second hand car?

Personal loan for a second-hand vehicle is generally an unsecured mode of finance offered by lending institutions including non-banking finance companies (NBFCs). As these are unsecured, you don’t need to pledge any asset as collateral when you avail the loan.

The loan amount varies across lenders and depends on multiple factors including your credit score.

For instance, Bajaj Finserv offers personal loans for used cars with financing up to Rs.25 lakh.

What are the applicable rates and charges?

A personal loan for second hand vehicle attracts certain rates and charges. While principal and interest are the major EMI components, the applicable interest rate, processing fees, EMI bounce charges, penal interest, secure fee, maintenance charges, foreclosure charges and part-payment fees also contribute to the amount payable. These amounts vary across lenders, so make sure youfind out all these details before availing the loan.

You can read about the fees and charges applicable on personal loans on your lender’s website.

What is the loan tenor for personal loans?

The tenor for used car loans also varies across lenders.The tenor might range from 24 to 60 months or even more.

Choose a tenor that allows you to comfortably pay off your loan. Note that while a high tenor might reduce your monthly EMIs, it would increase your interest outgo and vice-versa.
Additional Read: Find The Right Personal Loan Tenor That Works For You

What is the eligibility criteria for personal loans for used cars?

There is a basic set of eligibility criteria which you need to meet for availing a personal loan for second-hand car. Normally, you need to be a citizen of India under a certain age with a fixed income in order to avail this loan. Check the eligibility criteria outlined by your lender carefully before applying for a loan.

What are the documents necessary for availing the loan?

Most financial institutions require you to submit basic documents, identity and address proof, salary slip of the past two months and bank account statement of your salary account for the past three months for availing the loan.

How to apply for a personal loan to buy a second-hand vehicle?

You can avail a personal loan for second hand vehicle offline as well as online. If you want to avail a loan through offline channels, contact your preferred lender or an agent in-person. Furnish the required personal, financial, employment details and follow the lender’s instructions for smooth disbursal of funds.
Additional Read: A Step By Step Guide To Applying For A Bajaj Finserv Personal Loan

However, many today prefer to apply for loans online. It is easier, faster, and saves you the hassle of reaching out to your lender in person. Just visit the lender’s website and fill out the loan application form. Share the required details, select the loan tenor, the amount and submit the required documents for quick and hassle-free approval.

Common mistakes to avoid when you avail a personal loan for used cars

1. Before applying for a personal loan, ensure that you have a good credit score – usually 750 or above. A low credit score indicates poor credibility and makes the loan approval process difficult. A good credit score, on the other hand, can help you get better terms on your personal loan for used car.
2. Factor in all the applicable components like processing fees, EMI bounce charges, and others so that you are not duped with any hidden charges.
3. Figure out the loan tenor that you can pay comfortably. Opting for a loan with longer tenor might reduce your EMI, but it will increase the interest outgo. A shorter tenor may result in a high EMI, but will result in savings in the long run. Ideally, your EMI's should not exceed 30% of your monthly income.
4. Find out if there are any offers that can be customized for you, like flexible loan repayment options, loan tenor and applicable interest rates.
5. Most importantly, read your loan document carefully before you make your final decision.

Why choose Bajaj Finserv Personal Loans for Second-hand Cars

Bajaj Finserv is the most diversified NBFC in the country today and offers personal loans for used cars at reasonable rates. Here are five reasons why you should consider financing your second-hand vehicle with Bajaj Finserv.

strong>Additional Read: 5 Reasons Why Bajaj Finserv is the Most Preferred Personal Loan Provider in India
1. You need minimal documents for availing for a Bajaj Finserv Personal Loan. These include KYC documents - employee ID card, previous couple of month’s salary slips and last 3 months’ salary account statement.
2. Bajaj Finserv offers fast approval of your personal loan application. After you submit the required documents and the loan is approved, the loan amount is credited to your bank account within 24 hours.
3. Bajaj Finserv offers flexible repayment options. You can choose a tenor suitable for you which can range anywhere between 12-60 months.
4. There are no hidden charges when you avail a personal loan from Bajaj Finserv. You also do not have to pledge any collateral.

Save time on your personal loan application by checking your personal loan pre-approved offer. Bajaj Finserv offers pre-approved offers on personal loans and other products including home loans, business loans, and the EMI Network.

Looking for instant financing? Think it. Done with Bajaj Finserv.

The content of this document is meant merely for information purposes. The personal loan features mentioned in this article are subject to updation, completion, revision, verification and the same may change materially based on policy revisions. For more details, please visit our Personal Loan terms and conditions page here.

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