Buying a car is no longer a mammoth task nor is it a luxury. Almost all banks in India offer Car Loans at attractive interest rates for the purchase of both new and used car models.
So, if you’ve been thinking about upgrading from a two-wheeler to a four-wheeler or are just looking to get a new car, now is the time! With easy availability of Car Loans and paperless approval, getting a loan will be easier than choosing the colour you want for your car.
Additional Reading: How To Apply For A Used Car Loan
But before you get down to dreaming about going on long drives in your car, get acquainted with the nitty-gritties of a Car Loan, especially the eligibility bit. Being aware of the eligibility requirement for a Car Loan will ensure a smooth loan process.
Learning about the eligibility requirement for a Car Loan will help you get a good idea of the loan amount you are eligible to receive, based on which you can calculate your monthly EMIs.
So, along with comparing brands, models, mileage and features of various cars, also compare Car Loan options. See the interest rate offered by various banks, read up the eligibility requirement and keep the necessary documents ready.
Additional Reading: All you Need to Know Before You Get a Car Loan
Don’t get jittery. We’re going to make things extremely simple with our handy guide.
First things first. Eligibility differs based on the criteria set by the lender taking into account the borrower’s profile.
|Net Income Requirements||Rs.20,000 p.m upwards|
|Salaried or Self-employed3 yrs. (minimum) total experience/yrs. in business/profession; 2 yrs. (minimum) in current post/business/profession|
|Type of Car||Old or New – affects loan amount|
|Value of Car||Affects loan amount|
|Model of Car||Approved models|
1 yr. (minimum) stay at current residence
You can check with your respective bank if they have any additional requirements as policies may differ from one bank to another.
Factors Affecting Car Loan Eligibility?
- Income levels: Higher the income better the chances for a higher loan amount
- Income regularity: Regular income improves chances for loan approval
- Kind of Car: New cars are more easily financed than used cars; a high-end model will be expensive which means the borrower has to be able to pay the required down payment.
- Longer tenors will enhance repayment capacity
Additional Reading: Foreclosing Your Car Loan: Is It A Good Idea?
Car Loan documents
When you apply for a Car Loan, these are the documents which are commonly required, so keep them handy.
- Income proof: You need to submit your salary slips for the last three months and the statements of your bank account for last six months. For self-employed people, you need to submit your audited bank account statements for last six months.
- Employment Proof: You need to submit a copy of your appointment letter and a certificate of employment issued by your company. For self-employed individuals, the partnership deed or business establishment documents need to be submitted.
- Tax Proof: You need to submit your IT return or Form 16 documents for the last two years.
- Address Proof: Any government sanctioned KYC document can be submitted as proof of residence.
- Age Proof: Any government sanctioned KYC document can be submitted as proof of age
Additional Reading: Car Loans For NRIs!
Car Loan interest rates
The next important thing that you should be aware of, when applying for a Car Loan, is the interest rate. Here’s a list of Car Loan interest rates offered by some of the top-tier banks in the country:
|Name of Bank||Interest Rate|
|Oriental Bank of Commerce||9% – 11.60% Floating|
|ICICI Bank||9.10% – 13.25% Fixed|
|HDFC Bank||9.15% – 13.99% Fixed|
|Axis Bank||9% – 11.50% Fixed|
|Jammu & Kashmir Bank||9.3% – 9.55% Floating; 12.05% – 12.25% Fixed|
|TVS Credit Services||13.1% – 15% Floating|
|Sundaram Finance||9.50% – 14% Fixed|
|Capital First||12.5% – 14.5% Floating|
|Dena Bank||9.05 – 11.15% Floating|
|Federal Bank||9.75% Fixed|
* rates as on 24th May, 2017
Car Loan EMI Calculator
The BankBazaar Car Loan EMI calculator is an extremely useful tool which can be used to calculate your monthly EMIs. The main components of this online calculator include:
- Loan Amount: This is the first component you need to choose on the EMI calculator. You need to select the amount of the loan that you would like to apply for.
- Tenure: You need to choose a tenure over which you intend to repay your Car Loan.
- Interest Rate and Processing Fee: You need to put the interest rate offered by your preferred bank into the calculator. Don’t forget to include the processing fee of 2% (for most banks).
- Pre-payment Details: If you plan to go for pre-payment, you will need to insert this amount into the EMI calculator.
- Amortization Schedule: These details will help you understand your principal Car Loan amount, interest paid and the outstanding loan amount details on a half-yearly or annual basis.
Additional Reading: Your Car Loan EMI Calculator Guide
If you had any doubts about Car Loans, we hope they’ve been cleared now. And if you plan on applying for a Car Loan, BankBazaar has plenty on offer.