Car Loan Guide

Having a car can be a dream for many!! It is like taking the first big plunge towards a happy and prosperous life. A car cuts down your travelling hassles and extra expenses while improving your societal status. But what if you can’t afford the car that you desire to own? You can’t obviously spend all your savings on your car. In such a situation, it is a car loan that comes to your help. These are financial advances made by banks or financial institutions to help people buy the desired car for private or commercial use.

Criteria for a Car Loan
1. The applicant should be residing in India, be it in rural, semi-urban or urban India.
2. The age limit of the applicant for applying for a car loan should be at least 18 years or a maximum of 75 years.
3. The applicant should be either a salaried or a self-employed individual with sufficient working experience.

Documents required
1. A valid identity proof- The applicant should provide a valid ID proof which can be a PAN card, AADHAR card, driving license, passport or any other identity document issued by the government.
2. An age proof – As the applicant should be at least 18 years of age, he/she should provide a supporting document that states his/her age clearly. It can be a driving license, passport, ration card, school leaving certificate or any other government document that mentions the age.

3. A valid address proof – It is extremely crucial to provide a government issued document that has the present address mentioned. It can be an AADHAR card, PAN card, etc.

4. An income proof – There are ideally two types of employment: salaried and self-employment. The salaried individuals should submit current 6 months salary slips, last 3 months bank statement, Form-16, updated ITR, etc. whereas the self-employed individuals should furnish past 3 months bank statement, balance sheets, P&L accounts, ITR, etc.

5. Signature verification – To ensure your signature is unique, a signature verification proof is required.

  6. Recent photographs – Two copies of photographs, ideally two passport and stamp size photographs should be kept handy.

Car loan Application and Approval
A car loan can be applied both online and offline. Applying it online is the easiest way to reduce hassles. Just visit the bank portal with which you want to place the application or you can place the application through a reliable third-party website. The steps that are involved in the filing of application and approval of car loan are as follows:

• Check your credit score - a Credit score is a very important aspect of the car loan. As a beginner first check your credit score as banks offer loans to candidates having good a credit score.
• Fill up the application form: In the next step, place your loan application with the desired bank along with all the mandated documents. Make sure that the form is duly filled and you provide all authentic documents.
• Application verification- The bank will verify your documents and check your profile as well as a credit score to assess your eligibility. If you are found to be eligible your loan application will be processed.
• Loan approval- Banks take 1 to 5 days to approve a car loan. Though, this period might vary from bank to bank depending on the candidate’s profile.
• Disbursal of the loan- After some time of loan approval the amount will be disbursed either to your account or directly to the car dealer from whom you will be buying the car.

Features of Car Loan
1. Car Loan Interest Rate
With the growing demand for car loans, interest rates for car loans are competitive and fit your pocket. There are many lenders which offer car loans at affordable interest rates. Car loan interest rates start at as low as 9%.

2. Loan Tenure
You can choose the tenure for your car loan as per your repayment capacity. The car loan tenure ranges from 3-24 months.

3. Minimal Documentation
Car loans these days involve minimal documentation. Banks or NBFCs only ask for basic documents such as personal identity documents, address proofs, bank statements, etc.

4. Quick Process
You can now apply for car loans online. Online loans have now made the loan approval and disbursal process quick and easy. This eliminates the task of visiting the branches of the Banks or NBFCs.

5. Eligibility and Documentation for Car Loan
Every Bank or NBFC has an eligibility criterion which you have to fulfill. If you do not meet the criteria, then you are not eligible for the loan. There are a lot of factors such as your credit score, monthly income, credit history, age, nationality, etc. which encompass the eligibility criteria.