How to get a car loan in India


How to get a car loan in India

Owning a car is dream of almost every individual. Car plays a vital role in a human life as it not only used for reaching workplace but it makes entire journey of life very delightful. All trips can be very convenient and contented while they are with family, friends or other. Having a car of one’s style is being a status symbol of people these days.

Car Loan

Car manufacturers makes cars according to all income groups for society but still people face financial problem for owning car of their dreams. This financial problem has given rise to a new banking service of car loans. Car loans are available in almost all banks for different interesting and affordable interest rates. Prices of cars differ from company to company, so to get a car of choice people always needs to take benefit of car loans. This financial service offers repayment of loan in easy installments called EMIs. People who can afford car even they do not want to pay a lump sum amount for car, they will also go for car finance so they has to pay amount in installments.

People can get these loans direct through banks or otherwise car dealers also provide facility to search a beneficial car loan for their customers. Following are some steps to get a car loan in India:

  • First step to applying for a car loan is to review the various offers by different banks and then comparing them in terms of EMIs, their duration and interest rates.

  1. Eligibility criteria for a person to get a car loan in India is

  2. Minimum age 18 years

  3. Should be professionally employed or self employed

  4. Should have a stable income source

  5. Should posses a minimum credit rating

 

  • Important documents to get a car loan:

  1. Identity proof

  2. Address proof

  3. Income proof

  4. Statement of recent bank account, either current or saving.

  5. Income tax return of last two years.

  6. Net income should be greater than 2.5 lakhs per annum.

 

  • After getting all documents from an applicant banks will determine EMIs and interest rate for him on the basis of his credit worthiness and monthly income.  

  • After accessing applicant completely bank decides whether loan should be given or not. This process takes only few days and sometimes only one day depends on different banks.

How much amount of loan can be provided?

Car loans upto 10 lakhs can be provided by banks such as HDFC, PNB and axis bank depends on creditworthiness of applicant.

 

How much amount banks finance for car loan?

Banks generally provide 80-85% of car price as loan and other amount applicant has to pay himself as down payment. This loan amount can exceed to 48 times of income per month of applicant.

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