A used-car loan, also called a pre-owned or second-hand car loan, is financing that helps a borrower buy a vehicle that has already been owned and registered by someone else, rather than a brand-new car from a dealership. Borrowers typically use this kind of loan when they want a car within a smaller budget, when a specific model is no longer sold new, or when they prefer to spread the cost of a pre-owned vehicle over a fixed repayment period instead of paying the full price upfront.
The financed car usually acts as security for the loan, and the amount a borrower may receive depends on factors such as the vehicle's assessed value, age and condition, along with the applicant's profile and repayment capacity. Cholamandalam Investment and Finance Company, a non-banking financial company that has operated since 1978 and is part of the Murugappa Group, offers a pre-owned car loan that emphasises a largely digitised application and approval journey, limited paperwork and quick disbursal once documents are verified.
Chola highlights the convenience of in-principle sanction at the customer's location, doorstep support from its executives and a wide branch network, and it links the offering to its Gaadibazaar used-car portal so buyers can browse vehicles. Any sanction, funding level and final terms are subject to Chola's assessment and are not guaranteed.
A used vehicle is riskier collateral and depreciates faster, so lenders price the rate higher and finance a smaller share of the value. NBFCs often approve older cars and thinner files that banks decline.
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