Used Car Loan/Pre-owned Car Loan

A used car loan makes it easier to purchase a pre-owned vehicle as it comes with structured repayment options. Lenders evaluate factors like the car’s age, value, and the borrower’s creditworthiness to determine eligibility and interest rates. Typically, these loans cover 80–100% of the car’s value. However, since used cars depreciate faster, interest rates tend to be higher than those for new vehicles. To secure the best deal, it is important to compare lenders, check the processing fees, and review the prepayment terms before committing to a loan.

Get a pre-owned car loan of up to 100% of your vehicle’s price at low interest rates starting from 10.50% p.a. on Bajaj Markets. Repay the loan over a tenure of up to 72 months. With used car finance, you can also opt for a balance transfer. With used car finance, you can also pledge your car to borrow additional amounts and fulfil your financial obligations.

Here are some important details of car loans for used cars, available on Bajaj Markets, that you should know about prior to applying.

It is essential to evaluate key factors that impact loan eligibility, repayment terms, and overall affordability. Here’s what you should consider:

Loan Eligibility and Credit Score

Lenders assess your creditworthiness before approving a loan. A high credit score (750 or above) improves your chances of securing a loan with lower interest rates. A lower score may result in higher interest rates or even loan rejection. Check your credit report in advance and correct any discrepancies to avoid issues during the application process.

Interest Rates and Loan Tenure

Interest rates on used car loans tend to be higher than those for new cars due to faster depreciation. Compare rates from different lenders to find a competitive offer. Additionally, consider the loan tenure—while a longer tenure reduces monthly EMIs, it increases the total interest paid. Choosing a shorter tenure can help save on overall loan costs.

Loan Amount and Down Payment

Lenders typically finance 80–100% of the car’s value, requiring you to make a down payment. A higher down payment reduces the loan amount and interest burden. Evaluate your finances to determine a comfortable down payment while ensuring sufficient funds for other expenses.

Vehicle’s Age and Condition

Lenders set restrictions on the age of the vehicle they finance. Most banks do not offer loans if the cars are older than 8–10 years. Additionally, the car’s condition affects the loan amount and resale value. Always inspect the vehicle’s service history, accident records, and ownership details before finalising the purchase.

Lender Comparison and Processing Fees

Different lenders offer varied terms, including interest rates, processing fees, foreclosure charges, and loan conditions. Compare multiple options to find a cost-effective loan with minimal hidden fees. Check for prepayment and foreclosure charges if you plan to repay early.

EMI Affordability and Financial Planning

With a used car loan EMI calculator, get an estimate on the monthly instalments you may be required to make with this loan. Ensure that the EMI amount fits within your set budget and does not strain your finances. A general rule is that total EMIs (including other loans) should not exceed 40% of your monthly income.

Insurance and Additional Costs

A used car loan covers the vehicle’s cost but not additional expenses like insurance, registration, and maintenance. Factor these costs into your budget to avoid financial strain post-purchase. Some lenders may also require comprehensive insurance as a loan condition.

Loan Repayment Flexibility

Check whether the lender offers flexible repayment options such as part-prepayments, step-up EMIs, or refinancing options. A flexible repayment structure allows better financial management in case of income fluctuations.

Legal Verification and Documentation

Ensure that the used car has a clear title with no pending loans or legal disputes. Verify ownership documents, RC details, insurance validity, and road tax payments before purchasing. Lenders may reject a loan if the vehicle’s documentation is incomplete or incorrect.

Check out these basic eligibility criteria that you may be required to fulfil in order to secure a used car loan.

• Your age must be between 18-80 years

• You should have a CIBIL score of 720 or above

• You should be an Indian citizen

• You should be either self-employed or salaried

• As a salaried applicant, you should have a minimum work experience of 1 year

• As a salaried applicant, you should have a minimum monthly salary of ₹20,000

Provided below is a list of documents you will be required to submit when applying for a Bajaj Finserv Used Car Loan.

• KYC Documents: Aadhaar Card, Passport, Voter ID

• PAN Card

• Employee ID Card

• Salary slip of last 2 months

• Bank account statements of last 3 months

• Vehicle registration certificate

• Vehicle insurance copy

• ITR proof of last 2 years (if self-employed)

Here are the additional charges which may be levied on a pre-owned car loan:

Buying a used car can be a cost-effective way to own a vehicle, but it requires careful research and planning to ensure you get a good deal. From choosing the right car to completing the legal formalities, every step plays a crucial role in securing a reliable vehicle. Here are the key steps to follow when purchasing a used car:

Determine Your Budget

Setting a clear budget helps narrow down your choices and prevents overspending. Consider not just the car’s price but also additional expenses like insurance, registration, maintenance, and loan interest if you are financing the purchase.

Research and Shortlist Cars

Make a list of cars that fit your budget, lifestyle, and preferences. Compare factors like mileage, fuel efficiency, maintenance costs, and resale value. You can explore used car listings on dealer websites, marketplaces, and direct seller platforms to find available options.

Check the Car’s Age and Condition

Lenders and insurance providers often have restrictions on the car’s age. Generally, a used car should not be older than 8–10 years to qualify for financing. Additionally, inspect the car’s condition, including its engine, tyres, brakes, battery, and suspension. If possible, have a mechanic evaluate the vehicle for hidden issues.

Verify the Vehicle’s History

A car’s past usage can impact its performance and resale value. Check its service history, accident records, and ownership details. You can request a service booklet or check online vehicle history reports to confirm if the car has been maintained properly. Avoid vehicles with multiple ownership transfers, unresolved disputes, or accidental damage.

Take a Test Drive

A test drive helps assess the car’s comfort, handling, engine performance, and braking system. Drive on different road conditions to check for unusual noises, vibrations, or signs of wear and tear. Ensure all electrical components, such as headlights, indicators, and infotainment systems, are functioning properly.

Verify Legal Documents

Ensure that the following documents are in order before making a purchase:

• Registration Certificate (RC): Confirms the legal ownership of the car. Ensure the details match the seller’s identity.

• Insurance Policy: Check if the insurance is valid and claim-free. Transfer the insurance to your name after purchase.

• Pollution Under Control (PUC) Certificate: Confirms that the car meets emission standards

• Road Tax Receipts: Ensure road tax has been paid to avoid future liabilities

• Form 35 & Loan NOC: If the car was previously financed, verify that the loan is cleared and obtain a No Objection Certificate (NOC) from the lender

Negotiate the Price

Used car prices are not fixed, so there is room for negotiation. Compare prices from multiple sellers and check the car’s fair market value using online tools. Use any defects or pending maintenance work as leverage to negotiate a better deal.

Arrange Financing (If Needed)

If you plan to take a used car loan, compare lenders for the best interest rates and terms. Most banks finance 80–100% of the car’s value, but you may need to pay a down payment. Check processing fees, prepayment options, and EMI affordability before finalising the loan.

Complete the Ownership Transfer

Once the payment is made, transfer the vehicle ownership through the Regional Transport Office (RTO). The process includes:

• Submitting Form 29 and Form 30 signed by the seller

• Providing valid ID and address proof

• Paying the transfer fee

• Updating insurance details to reflect new ownership

Ensure that the Registration Certificate (RC) is updated with your name to avoid legal issues.

Get the Car Serviced and Insured

Before driving, get a full car servicing to check for any required maintenance. Change the engine oil, inspect brakes, and replace worn-out parts if needed. Also, transfer or buy a new insurance policy in your name to comply with legal requirements.

Reference of all T&C necessarily refers to the terms of the Partners as regards to pre-approved offers and loan processing time amongst other conditions.