What documentation do I need as a self-employed person to apply for a used car loan?

As a self-employed individual, you may need to provide extra documentation demonstrating your income sources when applying for a used car loan. This helps give an accurate picture of your financial situation.

Some key documents to have ready include:

• Tax Returns: As a self-employed individual applying for a used car loan, you are required to usually have at least 2 years of Income Tax Returns (ITRs) handy, showing your revenue, expenses, and net income from your business or freelance work. This verifies you have a steady, ongoing self-employment income.
• Bank Statements: Recent bank statements generally for the past six months establish cash flow and serve as evidence that money is coming in regularly from your professional endeavours. Highlight deposits from clients/customers.
• Contracts/Agreements: Any active contracts, engagement letters, service agreements, or partnerships help quantify future earnings over the next 12 months. These reinforce the consistency of assignments/projects.
• KYC Documents: Standard Know Your Customer (KYC) documents like Aadhaar card, PAN card, voter ID, and proof of address are typically required.

Essentially, lending institutions want to confirm your self-employed status, length of time in business, and current and expected revenues. Provide whatever materials best demonstrate the stability of your cash flows before taking out a used car loan.