Pre-Owned Car Loan

Documents Required for a Used Car Loan: Complete Checklist

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22/8/25 5:32 AM  | 3 Minutes
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Owning a car brings freedom and convenience, but securing a used car loan hinges on proper documentation. Whether you're salaried or self-employed, knowing what paperwork is needed can streamline your Pre-owned Car Loan application and avoid delays. Here's what to keep in mind.

Documentation for Used car Loans for Salaried individuals

When applying for a loan for used cars as a salaried individual, it's important to understand the used car loan eligibility criteria that lenders typically look for in your application. A standard set of documents is typically required to process your application:

1. Identity and Address Proof (KYC Documents)

For identity verification, keep documents such as your Aadhaar Card, PAN card, Voter ID, or Passport ready. Note that identity verification includes confirming your age, address, and your signature. Other documents that could serve as proof of address include your latest electricity bill, rental agreement, or a registered property document.

2. Income and Employment Proof

As employment and income proof to get a second-hand car loan, you can compile your salary slips from the last 6 months. As a salaried professional, you’re also likely to be paying your taxes each year. Grab a copy latest form of your Income Tax Return (ITR) for the latest financial year and request your employer to send you your Form 16. Lenders typically look to assess your repayment capability through these documents, including your CIBIL score.

3. Bank Statements

A six-month bank statement from your salary account helps lenders understand what your monthly expenses look like. For example, you have recently made a big-ticket purchase and at the same time repaying an ongoing loan, both will reflect in your account. This will give the lender clarity on your remaining disposable income, your credit card usage and in turn, your repayment capacity.

Used Car Loan Documents for Self-employed Individuals

If you're a business owner or freelancer applying for a used car loan, lenders typically require documents that verify your identity, income, and professional stability. Here's what you'll need:

1. Office/Business Proof

These documents help the lender validate the legal existence and nature of your business. They could include your MSME Registration Certificate, GST registration, and Shops and Establishments Registration Certificate.

2. Identity and Address Proof

Just like salaried applicants, you must provide valid identity proof and residence. Accepted documents include Aadhaar card, PAN card, Passport, Voter ID, or your driving license for identity, and recent utility bills, lease agreements, or property tax receipts for address verification. Make sure the details are consistent across all loan documents to avoid unnecessary delays.

3. Income Proof

Submit ITRs for the last two years as income proof, alongside the bank statements of your primary business account for the last six months. Depending on your business, you may also need to provide your lender with an audited Balance Sheet and the Profit & Loss Account of the last two years to determine the maximum amount of the loan you can get.

Avoid frequent check bounces or irregular high-value withdrawals before application, as these can raise red flags. Whether you’re a small trader or a digital consultant, consistent yearly income reflected in your ITR and statements will prove your business to be financially reliable.

How to Apply for a Used Car Loan

Applying for a used car loan is simple; just follow these steps:

Step 1. Check Car Loan Eligibility

To qualify for a used car loan, you must be an Indian citizen aged between 21 and 65. Lenders look for stable income, whether you're salaried or self-employed, and a good credit score, ideally 750 or above.

Step 2. Gather Documents

You’ll need ID and address proof (like Aadhaar or PAN), income proof (salary slips, bank statements, ITR), and vehicle documents such as the RC book and insurance. Also, fill out and sign the loan application form.

Step 3. Apply for the Loan

You can apply online by visiting the lender’s website and uploading your documents, or offline by visiting a bank, NBFC, or dealership and submitting everything in person.

Step 4. Approval & Disbursement

The lender will verify your details and assess your car loan eligibility. Once approved, the loan amount is usually transferred directly to the car seller or dealer within a few days.

To Conclude

Choosing a used car is a smart way to balance quality and cost, whether upgrading, buying your first vehicle, or seeking better value. With the right set of documents, awareness of interest rates, and using EMI calculators to estimate your payment a clear understanding of lender requirements, you can avoid delays and focus on finding the right vehicle for your needs.

Looking for financing options that offer minimal documentation? Poonawalla Fincorp offers a Pre-owned Car Loan of up to Rs 75 lakh with a 100% digital application process.

Frequently Asked Questions

How many months of bank statements are required? 

Most lenders ask for the last six months of bank statements from your primary salary or business account to assess your repayment capacity.

Is insurance mandatory before the used car loan is disbursed? 

Yes, lenders usually require valid car insurance and your mobile number before loan approval and disbursing the loan. If the car is not insured, you may be asked to purchase or renew the policy as part of the loan process.

Can I apply for a used car loan online? 

Yes, Poonawalla Fincorp offers a Pre-owned Car Loan of up to Rs 75 lakh with 100% digital application process.

What happens if my used car loan application is rejected due to documentation issues? 

You can reapply after correcting the issues. It’s advisable to consult the lender to understand the exact reason for rejection and ensure all used car loan documents required are accurate and complete.  

What are the documents required to avail of a used car loan?

The documents required to apply for a used car loan include KYC documents, including identity proof, employment proof, bank statements, and documents related to the used car's ownership and insurance.

What is the minimum and maximum age requirement for getting a second-hand car loan?

The minimum age requirement for a used car loan is 21 years, and the maximum age limit at loan maturity is 65 years.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.

*Terms and Conditions apply
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