Check Used Car Loan Eligibility Criteria

If you want to buy your dream car but are putting it off due to budget constraints, consider opting for a used car. You can buy a high-end car model at an affordable price and easily finance it through a used car loan. This loan has a simplified application process, non-stringent eligibility criteria, and minimal documentation requirements.

At Hero FinCorp, we know that you don't want any hassles in obtaining funds to drive your dream four-wheeler home. This is why we have kept our used car loan eligibility criteria to a bare minimum.

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Hero FinCorp Used Car Loan Eligibility

Buying your dream car is a thrilling experience but requires a large amount of available funds. The best way to go about it is to get a used car financed through a used car loan. At Hero FinCorp, we have kept our used car loan eligibility to a minimum, whether you are a self-employed or salaried applicant. The following table provides a handy list for our used car loan eligibility check:

Nationality and Age

You must be an Indian citizen.
If you are a salaried employee, your minimum and maximum age should be 18 and 60 years, respectively.
If you are self-employed, you must be at least 18 years old and not older than 65 years at the end of the loan term.

Occupation status

If you are salaried, a minimum of one year of continuous job experience is mandatory.
If you are self-employed, you must have a year of experience in your current business.

Loan Tenure

You can obtain funds for a minimum of one year and a maximum of five years.

Maximum Loan Amount

We provide used car loans ranging from Rs 50,000 to Rs 50,00,000.
You can borrow up to 90% of the car's market value.
The maximum LTV depends upon your credit profile and car's condition.
We provide a top-up loan with a maximum LTV of 175% of your existing loan.

Monthly Income

We do not have predefined minimum monthly income criteria.

Factors Affecting Used Car Loan Eligibility Criteria

Since used car loans are secured loans, you do not need to meet any stringent qualification criteria. Some of the important factors we consider when determining your eligibility for used car loans are as follows:

Credit history

Your credit history reflects your debt-management skills. It tells us if you have a previous default on your name or if you have skipped several EMIs in the past. A poor credit history may disqualify you from obtaining a used car loan.

Income

Even though a used car loan is secured financing, we still consider your monthly income, occupation status, and employer's credibility. The reason is it allows us to determine whether you will be able to pay your EMIs on time in the future.

Debt-to-income ratio

Your debt-to-income ratio is correlated with your income. It is your leftover income after paying your existing monthly debt obligations. If your debt-to-income ratio is greater than 50% and other factors are not satisfactory, you will not be eligible for our used car loan.

Car condition

The condition of your car defines its longevity and resale value. If the car you want to buy has damaged internal components like a leakage in the engine or if it has been in a serious accident, it will not qualify under our used car loan eligibility criteria.

How to Improve Your Eligibility for Used Car Loan?

You can boost your chances for second-hand car loan eligibility by following the tips outlined below.

Review your credit report

You must review your credit report at least once a year. It will provide you with information about your current credit profile. If there is any negative feedback, work on removing it. Look for any errors in your report and try to correct them by communicating with the lender.

Apply with a co-applicant

If you are falling short of our minimum used car loan eligibility criteria, adding a co-applicant with a strong credit profile can work in your favour. However, remember that the co-applicant will be equally liable for your debt repayment.

Additional income

Sometimes, your primary source of income may not meet our eligibility criteria. In that case, if you have any additional source of income, providing proof of the same can help your used car loan eligibility.

Increase down payment

Increasing your down payment means you are applying for a smaller loan, which means lower EMIs. In this case, you may be able to get a loan even if your income is average and your debt-to-income ratio is less than 50%.

Frequently Asked Questions (FAQs)

Why is car condition important in determining used car loan eligibility?

The condition of the car you wish to buy determines its resale value. If the car in question has several dents, a damaged engine, or malfunctioning electrical components, it will not be worth much in the future. As a result, in the event of a default, the lender will have a difficult time recovering its losses by selling the car.

What role does the car model play in my used car loan approval?

The model of the car, like its condition, plays an important role in determining its resale value. If you are buying an obsolete car model whose production was discontinued by the manufacturer years ago, the lender may not approve your used car loan. The reason is obvious: if you default on your loan and the lender decides to auction off your car, they will be unable to find a buyer.

What is the maximum loan amount I can get for a used car through a second hand car loan?

With Hero FinCorp, you can get a used car loan for an amount up to Rs 50 lakhs or a maximum LTV of 90%. The maximum amount you can borrow is determined by your age, income, debt-to-income ratio, credit score, and occupation status. You can qualify for the highest amount if your profile convinces your lender that you have a good repayment potential.

How can I improve my credit profile to satisfy the lender's minimum used car loan eligibility criteria?

In order to improve your credit score, pay off previous loan defaults and automate your existing debt obligations to avoid late EMI payments. If you have a credit card, limit its usage to below 30% of the total authorised limit.

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