Does the age of the car impact the loan eligibility?

The age of the used vehicle is very important when applying for a used car loan in India. Lenders are very careful about the age of the vehicle at the time of purchase and what the age will be when it is paid off. Older vehicles are typically considered riskier when the borrower pays them off, as they depreciate more quickly and may not be as reliable, which deters lenders.

Most banks and finance companies have strict guidelines on the maximum age of a vehicle. For example, some lenders state that a vehicle cannot be older than 10 or 12 years old from the end of the loan. If you wish to borrow for a vehicle that is already several years old, you may have a shorter loan tenure or be offered a smaller loan. This is to ensure the vehicle has some value left when the loan is paid off.

Lenders will check the condition of the vehicle before they approve the loan using either an inspection of the vehicle (by sending someone to inspect it) or by submitting a professional valuation report for the car. If the vehicle is sound, it is more likely that the loan will be approved (even if the vehicle is older). Suppose the vehicle is too old or in poor condition. In that case, your application may be rejected, or you may receive a lower offer.