Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs SUPPORT
Loans For You
Loans for Business
Investment
Insurance
Apply

Quick Links for loans

Quick Links for Insurance

Investment

Offers Quick Pay
Back

Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure
Know More
Back

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required
Know More
Back

New Commercial Vehicle Financing

  • First time user
  • Retail and strategic Clients
Know More
Back

Used Commercial Vehicle finance

  • Repurchase
  • Refinance
  • Top up
  • Balance Transfer
Know More
Menu  
 
Apply Now

Tata Capital > Blog > Loan for Vehicle > The Eligibility Criteria for New-Car Loans v/s Used-Car Loans

Loan for Vehicle

The Eligibility Criteria for New-Car Loans v/s Used-Car Loans

The Eligibility Criteria for New-Car Loans v/s Used-Car Loans

Mr Shetty wanted to buy a vehicle for his son. But he was not sure whether to get a brand new car or a pre-used one. Keeping in mind that his son was an inexperienced driver, he decided to take a loan to buy a used car. But Mr Shetty was confused about what kind of a loan to take. The options included a regular car loan, a used-car loan, and a personal loan. So, he visited the Tata Capital Online car store to get the answers to all his queries.

Know More

Financing a car: The different available loans

If you are buying a new car, you can get attractive car loans from many lenders. But when buying a used car, you have to opt for a used-car loan or a personal loan. A used-car loan is a popular financing option for used cars. Take a look at the table to understand what differentiates a used-car loan from the new-car loan.

  NEW-CAR LOAN USED-CAR LOAN
Available for Brand new cars    Pre-owned cars
Loan amount Up to 100% of the value of the car Up to 90% of the value of the car
Interest rate 8%–9% 12%–17%
Tenure Up to seven years Up to five years

Eligibility criteria for new-car loan and used-car loan

Your eligibility for a used car loan can depend on whether you are a salaried employee or a self-employed professional. For new-car loans for salaried individuals, you must have an annual income of at least Rs. 2.5 lakhs. For those who are self-employed, this may drop to Rs. 2 lakhs. The loan tenure, in this case, could be anywhere between 12 to 60 months. But this could also go up to 84 months for high-end cars.

In the case of used cars, a salaried individual must earn at least Rs. 3 lakhs per year. He must have work experience of at least two years. Of this, one year must be with the current employer. What if you are self-employed or own a business? Then your annual income should be Rs. 2 lakh. You would also have to be doing business for at least three years.

Why opt for a used-car loan?

More and more people are considering a used-car loan when buying a pre-owned vehicle. The main reasons for this are:

  1. Credit score: The biggest advantage here is the credit score. Many people who buy used cars do so because of financial constraints and low credit scores. It is difficult to get personal loans with a low credit score. But you could still get a used-car loan if you are fairly above the average level.
  2. Economical: As the used car’s value is lower, the used-car loan principal is much lower than a new car loan principal. The loan is available for a shorter duration too. This makes it easier for you to manage the loan and your other expenses.  
  3. Wide availability: These days, many used-car vendors offer loans. The Tata Capital Online Car Store is one such platform.

Getting a used-car loan

In today’s times, it is easy to get a car loan. You can complete the entire process online making it convenient and quick. You can also choose a flexible repayment option. This may reduce the burden of Equated Monthly Instalments (EMIs). After all, the loan should not become a liability for you.

Apply Now

Your Smooth Ride Awaits: Take a Quick and Easy Vehicle Loans!

Apply now
Popular Searches
safest car in india car down payment pdi full form tax benefit on car loan pdi checklist best cng mileage car sedan cars under 10 lakhs what is adas top rated electric cars best sedan cars in india
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Other Websites

Useful Links and Resources

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Policies, Codes & Other Documents

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.