Importance of car loan documents and its checklist

Getting a four-wheeler is no more a distant dream, especially for an average middle-class family today. Banks and non-banking financial companies (NBFCs) offer a range of car loans in India. The process has become simpler, thanks to online applications. If there are appropriate documents in place, some lenders offer 100 per cent financing.

The paperwork has become simpler in recent times. However, car loan documents requirement differs for salaried and self-employed people. Salaried people can avail of the credit easily. But the independent professionals have to provide additional materials to prove they are creditworthy.

Why are the documents important?

• Financial institutions seek the files to check the credibility and financial stability of the individual
• It proves the creditworthiness of the person
• Lenders learn about the credit score of the customer
• Financial institutes need the papers to offer the ideal deal to the customer

Considering all these factors, car loan documents procedure cannot be missed.

What are the requirements for salaried and independent people?

1. Salaried individuals:

• ID proofs: Government IDs like PAN card, passport, driving license, voter’s ID, act like identity proofs
• Address proofs: This is your residence proof that includes passport, driving license, ration card, utility bills, insurance papers
• Age proofs: Some lenders ask them along with other files. They are a birth certificate, school certificate, passport, PAN card
• Income proofs: This is critical for salaried individuals as it portrays their financial profile. The documents needed here are payment slips and bank statement
• Employment proofs: It verifies your stability with the organisation. This requires you to submit your offer and promotion letter
• Signature proof: Lenders provide a separate form for the signatures

2. Self-employed individuals:

• ID proofs: They are similar to that of salaried people like PAN card, passport, driving license, voter’s ID
• Address proofs: They are ration card, driving license, passport, utility bills, insurance papers, company location files
• Age proofs: These include birth certificate, school certificate, PAN card, passport
• Business proofs: You company registration papers, utility bills, maintenance bills, profit & loss statement, balance sheet
• Income proofs: ITR returns of the last 2 years, bank statement of the past 6 months
• Signature proofs: These forms are given by the lenders to the customers to capture their signature

Apart from the above-mentioned checklist, the vehicle documents such as the dealer certificate, used car papers should be produced at the time of application.

In case you are unsure of the car loans document list, you can visit the local branch or the lenders portal to inquire about them. Ensure the materials are up to date and relevant. The lenders verify them and then process the credit.