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Get closer to your dream of owning a car and make it a reality. A car loan is for those who want to buy a car but don't have that sort of time or resources. Many financial institutions and banks provide loans along with interest charges to someone who wants to own a car but doesn't have the money to. But it isn't that simple; you need to meet certain eligibility parameters to be qualified for a car loan. Besides, buying a car is not a child's pay. Thus, getting a car loan requires some amount of knowledge and research.
So, if you are getting a car loan for the first time, here is a quick guide that will make the entire process easier for you:
Basics of A Car Loan
Buying a car requires a lot of financial planning as it is expensive and not a common everyday purchase. It is understandable to need external financial support from banks and other lending institutions. These institutions can provide you with a hefty amount known as a car loan to help you afford a car.Taking a car loan means that you are borrowing money to get a car for yourself,andyou will return the entire amount with interest within a specified period. You can compare the car loan interest rates amongst various organizations and financial institutions that offer such loans to get the one that suits you the best.Before you apply for a car loan, you need to ask yourself these two vital questions:
- Are you getting a new car or a pre-owned car?
- Which model do you want?
Depending on the chosen car price and model, the bank or the financial institution approves the loan amount. Further, get the car insured for safety purposes, and then calculate the car loan interest rates to confirm your EMI.
Eligibility Criteria For A Car Loan
You can get a car loan approved if you fulfil the following parameters:- The borrower must fall under the age bracket of 18 to 75 years
- The net monthly salary of the borrower should be at least INR 10,000
- If you are self-employed, you must have work experience of 2-3 years to get a car loan
- The borrower should be a residing citizen of India to apply for a car loan from Indian banks and financial institutions
- You must at least have a year of residential stability to apply for a car loan
- A decent credit score and reliable credit history
Documents Required To Get A Car Loan
If you qualify the eligibility criteria to get a car loan, the next step is to ensure and arrange proper paperwork to commence the process. The needed documents may vary from bank to bank, but you can arrange these documents that are commonly asked for by every institution:- A Government Authorized Identity Proof – Your PAN card, driving license, AADHAR card, passport, or any other such document issued by the government can be considered as identity proof when applying for a car loan.
- Proof of Age – The borrower should be 18 years or above to apply for a car loan; thus, a document to prove the age is essential. You can either submit your passport, driving license, ration card, school leaving certificate or any other government-issued certificate that states your age.
- Address Proof– A valid address proof, such as a PAN card, AADHAR card, is required to prove that you are residing citizen of the country.
- Proof of Income– Apart from these documents, if you are a salaried individual, you need to provide the salary slips of at least six months along with your bank statement for the past three months. For self-employed individuals, the requirement might vary. Thus, make sure you check thoroughly before applying for a car loan.
- Others – A signature verification and your recent photograph are also needed with all the documents mentioned above.
Few Final Things To Consider Before Applying for a Car Loan
Before you apply for a car loan, make sure you can afford to repay the amount in the given time. A loan, if not repaid on time, can cause a major financial crisis in the future. So, plan the budget and then make the final decision. You don't rush it, first sit back and consider your EMIs and other financial obligations before borrowing the money. Then, choose a bank or institution you want to go for. It would be best to go for reliable banks such as Axis Bank that offer several car loan interest rates for distinct financial profiles.
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