Can I apply for a used car loan if I am a self-employed professional?

Most self-employed individuals will obviously qualify for a second-hand car loan, as is the case. There is a little more information required for self-employed applicants versus full time employees. It is an easy process and could be done from the comfort of your own home in most circumstances.

What you will need:

Eligibility Basics: 

• From a very basic level you should be over 21 (in some cases lenders want to see at least 23 or 25).
• Your business should be trading for a minimum of 2 years (sometimes 3 years, as determined by your lender).
• You also need to show steady income, and good credit which is usually a score above 700.

Evidence of Income:

• You must provide evidence of income via income tax returns illustrating at least two years income.
• Bank statements/credit card statements to illustrate business activity, and regular transactions.
• You may be asked to provide financial statements that have been audited, or if your business is registered with local governmental authorities.

Additional Documentation Requirements:

• KYC documentation; your Aadhaar, PAN card, & address proof.
• Purchase details for vehicle; registration details, insurance papers, etc.

Application Process:

• Most lenders usually allow you to apply online.
• Once you upload your documentation, you need to wait for them to validate the information.
• If the lender thinks it is relevant, they may contact you to clarify any details, and may arrange to carry out a vehicle check, etc.

Expect the Following:

• Interest rates may be slightly higher for self-employed individuals, as they are viewed as riskier borrowers.
• If the lender requires further documentation, this may mean slightly longer approval times when you are self-employed.
• Approved loan amounts will then be transferred to your bank account or the seller directly.