Car Loan Details
Car Loan Overview
A car loan is a credit borrowed by a customer to purchase a new or used car. Let’s take a look at the overall picture of Car Loan.
Car loans are the simple means to a glorious life milestone- owning your dream car. Almost all of us want to own that shiny set of wheels and drive it triumphantly, into the sunset.
However, owning a car (vehicle in general) in India is a costly proposition, one that usually demands the impetus of a sizable financial assistance from banks/ financial institutions that have dedicated loan products in this regard. Almost all private/public sector lenders in India offer car loan options with terms and conditions that are highly customer friendly, affordable and scalable.
By qualifying against a very simple list of identity, income and credit history qualifications, you can be the proud owner of your own brand new car. Now you don’t need to go to the banks for a car loan you can apply for a car loan online.
- People choose car loan to pay for the expensive cost of the car.
- Buying a car is an expensive investment and a car loan is beneficial for a middle class Indian.
- The savings of the person can contribute to the car loan down payment and the car loan can cover the after expenses.
- If you buy the car with your liquid cash them you have the chances of getting on the IT department’s radar.
- Car loans allow you to build a good credit history if you repay back the loan on time.
- The credit history will allow you to take more loans in the future.
- Thus vehicle loans are the safest and the surest way to purchase your dream car.
- The interest rates for vehicle loans are different for different banks.
- The car loan transfer option allows the transfer of car loan from one person to the other.
- The vehicle loan processing fee is not much.
In India buying a car with liquid cash not only makes you spend a lot of money but also puts you on the radar of the income tax department.
Taking a car or vehicle loan has a lot of advantages:
- When you take a car loan to pay for your car, you can use your savings for other purposes in the present or in the future.
- The other big advantage of the car loan is that it is secured against the car itself and therefore you do not need to mortgage any other property as collateral.
- You are allowed to use your car while paying for the car loan.
- This allows you to build a good credit history by following the repayment cycle diligently.
- A good credit history allows you to take other loans in the future and therefore taking a car loan is very beneficial.
- Car loans are therefore a safe option for purchasing your car.
- Self-employed individuals are eligible for car loan tax benefits under section 80C of the Income Tax Act.
Car loans in India have the following characteristics:
- A bank that offers car or vehicle loan should provide a flexible tenure for repaying back the loan. The repayment period can be between 1 to 7 years.
- The interest of car loan is fixed while repaying the loan through EMI. This makes sure that you pay a fixed amount each month for repaying the car loan.
- You can get a car loan for a new or a second-hand car. Although most people prefer to take a car loan for a first-hand and car.
- A car loan allows you to buy a better car as compared to that can be afforded with your budget because the approval of car loan is easy.
- Car loans in India can be availed easily as compared to other loans.
- This loan does not require a lot of documents and the instructions are mentioned clearly while taking this loan.
- The amount of money that can be borrowed for a car loan is 1.5 crores and comprises of 100% the vehicle on road price.
- The car loan bank of India can provide reasonable EMIs with flexible tenure periods.
- While there are many car loan options available you should choose the one that is pre-approved.
- This will make sure that you get your funds on time.
- It will also ensure the easy approval of your loan.
- The banks approve the loan by examining carefully the credit history.
- When you are eligible for a pre-approved loan it means that the bank or the financial services company is ready to offer you the loan after carefully verifying your credit profile and repayment history.
- This option will make your loan approval very easy.
If you want the approval of your car loan easily you should choose a pre-approved loan.
Always go for car loan best bank in order to avail maximum benefits.
Do your research for best car loan India.
The car loan compare online websites will help you in doing so.
In order to get such a loan easily you should follow the following steps:
- Check your credit report
- A lot of banks will allow individuals to check their credit report once every year without charging any extra fees.
- You can check your credit report in order to verify any standing in terms of credit and then resolve all the errors such as collection, late payment, incorrect credit limit, etc.
- If any of the errors are not resolved it can have a very bad impact on the credit score and hence hinder the process of approval of car loan.
- When you check your credit report it will give you a rough idea of how the lenders will treat your application.
- Look for your options
You should check the different rates of interest of banks in and then apply for the loan accordingly now you can apply for Car Loan online also.
Choose car loan best bank for getting maximum benefits.
- Get car insurance with full coverage
- The main concern of banks while giving a loan is to not incur any sort of losses.
- Therefore having a full-time coverage of insurance is a major requirement before sanctioning a car loan as it helps you to cover the balance debt.
- You can also have a Guaranteed Auto Protection(GAP) insurance which covers the difference amount between the insurance loss of your car and outstanding loan.
- Pay your bills on time
- If you want to apply for a car loan to buy your dream car, you need to have a monthly pre-tax income and a debt-to-income ratio(DTI) that is manageable.
- You can increase your DTI by clearing off your pending credit card debts.
- You can also increase it by paying your bills on time.
- If this is not possible then you can have the timely payment of your bills at least 6 months before your loan application.
- If you pay your bills on time it is going to give an assurance to the lender that you will pay your EMI on time.
- This will enable you to secure a loan on time.
- Borrow as less as you can:
- If you borrow a small amount of money then it will be easier for you to pay the EMI on time.
- Also, the interest amount will decrease easily.
- Carefully examine the terms of the loan:
- A car loan has a lower EMI but a larger tenure period.
- Before finalizing everything make sure that you choose a plan with a lower rate of interest and shorter tenure period.
- Choose a plan that fits your budget:
- The capability to repay the loan has a big impact on the approval of the loan.
- Make sure that you always choose a scheme that is affordable.
- If you are already paying EMI for the other loans that you have taken then make sure that you also pay an EMI for the car loan.
Anybody in India who wants to avail the car loan can apply for it.
The basic requirements for car loan eligibility are as follows:
- Employment status
- Demographical factors
The common requirements for being eligible for a car loan are as follows:
- The person can be of India or outside of India.
- The person should be self-employed, salaried or should have a business.
- The person should be at least 21 years old and should not be more than 65 years of age.
- The salaried person should be in the current job for a year should be in the business for two years.
- The person should meet the minimum criteria.
There are many documents required for the car loan even if you apply for Car Loan online. Documents like proof of income, identity and residence proof are required.
Documents required for self-employed people:
The car loan documents required are as follows:
- A duly filled and signed application form that can be found from the website or from a bank.
- 4-6 passport sized photographs
- Identity proof like a passport
- Aadhar car or employee identity card.
- Address proof like a bank statement.
- Age proof like a voter ID card.
Documents required by salaried individuals:
- The salary slips for the last three months
- Latest acknowledged IT return
- Profit and Loss statement
- Balance sheet which is certified by a C.A
- The sales of last two years
- PAN card
- Documents that provide the information about the vehicle
- The stability and ownership proof of the business
- Form 16 with proper computation of income
- Latest 6 months bank statement
- The photocopy of the Vehicle’s Motor insurance and driver’s license.
- Which cars can be financed by car loans?
All cars from small to medium size, Sports Utility Vehicles (SUV), Multi Utility Vehicles (MUV) come under the car loan finances.
- How much amount can be given under car loan?
The minimum amount offered can be around 1 lakhs.
- What car loan tenures are easily available?
The repayment tenures available can be from 12 months to a year or from 84 months to 7 years depending upon the loan amount and the capability of the customer to repay the amount.
The car loan max tenure is 7 years.
- Can I borrow an additional loan over my allotted second-hand car loan?
A lot of banks offer the option of refinancing or borrowing an additional loan over an allotted second-hand car loan
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