In present times, getting a car loan has become extremely easy and simple. With an easy monthly instalment option, you can easily repay the car loan amount. But if you are availing a car loan for the first time, it is extremely important to know about the car financing basics before you take the jump.
We bring you a handy guide so that as a beginner, you can enlighten yourself with some of the vital basics about the car loan:
Eligibility Criteria for a Car Loan
The basic eligibility criteria to get a car loan are as follows:
The age of the applicant who is applying for the car loan should be at least 18 years and a maximum of 75 years.
He/She should have a regular monthly income of INR 10,000.
The applicant must be a salaried or a self-employed individual with at least 2 to 3 years of prior work experience.
The applicant should have an approved residence proof with a good parking space.
Documents Needed for Car Loan
In case you are eligible to apply for a car loan, then you can move to the next step of documentation. It is important to provide the necessary documents to ensure that the car loan process is smoothly carried on by the banks and various other financial institutions of your choice. Following are the documents that will help in processing your car loan:
A Valid Identity Proof : It is the responsibility of an applicant to provide valid ID proof, which can be a PAN card, AADHAR card, driving license, passport or any other valid identity proof issued by the Indian Government.
An Age Proof: To buy a car loan, the applicant should be 18 years old; 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 important document that clearly mentions the age.
A Valid Address Proof: It is important to provide a Government issued document that states your permanent address. It can either be an AADHAR card or the PAN card.
An Income Proof: The salaried individuals should submit their current 6 months salary slips, last 3 months bank statement, and Form 16-which has to be updated with ITR. At the same time, the self-employed individuals should provide past 3 months bank statement, balance sheets, P&L accounts, and ITR.
Recent Photographs: Two passport size photographs should always be kept handy.
How to Avail a Car Loan?
After carefully surpassing the documentation phase, you are supposed to apply for a car loan
. The following steps will help your car loan approval process go smoothly:
Know your Budget:
As a first step, it is extremely important that you should know your budget to know what kind of car you can afford
. You should evaluate the expenses that will incur the moment you will apply for a car loan, such as car maintenance and car registration costs.
Plan the Repayment Cycle: According to your budget, carefully plan the amount that will go into paying your monthly instalments. To further ease out the process, you can use a car loan emi calculator, which will help in calculating your interest rate, the tenure of the loan period and the amount to pay back in EMIs.
Get Approval First: It is important to get your car loan approved, to make the process of car loan easier and flexible for you.
Go for Car Shopping: This is the final step when you are completely ready to shop for the car of your choice. It is advisable to research beforehand to know which car will be the best for you and will suit your needs. Always remember to purchase a car according to your budget.
Avail Discounts and Offers: Deciding to purchase a car, especially during the year ending and festive season, can help you gain heavy discounts as banks offer low-interest rates and other special offers during such occasions. Watch out for special discounts during the festive seasons.
Before investing in a car, it is advisable that you should carefully compare and analyze different car loan options and choose the one that will suit your needs the best. Many of India’s trusted financial institutions for example: Axis Bank, offers easy and hassle-free car loans. With Axis Bank, you can easily avail a car loan or opt for a pre-approved car loan and get the best interest rates.
So what are your waiting for? Use these tips to plan your Car Loan and get ready to drive your dream car!