Where there is a continuous price rise, saving for months and years to purchase a four-wheeler is a task. In such scenarios, car loans come to the rescue, especially for middle-class Indians. This sudden emergence has led to a sudden emergence of attractive investment offers from several banks and other financial institutes.
Following are some key facts about car loan documents, eligibility, and so forth –
Eligibility:
Like any other borrowing financial instrument, car loan features an array of eligibility which considers your income level as well as credit score. A score is a three-digit number which should fall between the range of 750 to 900 for qualifying for the loan. A poor credit score can derail your application process. Make sure to get a copy of the credit report before initiating the application process.
Some documents required for car loan are –
ID and address proofs
Signature proof
Income proofs
Business continuity proof
Any other relevant document as specified by the lender
This is only a shortlist of documents needed. There might be other required documents as prescribed by the lender.
The amount, interest rates, and tenure:
The amount disbursed gets affected by varied factors such as income level, credit score, and the repayment capacity. Therefore, the amount may vary, but most lenders sanction amount up to INR 50 lakh with the total disbursed amount not exceeding beyond 80 per cent of showroom price of the vehicle.
Owing to high competition, the interest rates are affordable and tends to get affected mostly by the loan amount, your credit ratings, loan tenure, prior relationship with the lender, and other factors.
The minimum four-wheeler tenure is typically 12 months. Most lenders do not offer a duration beyond five years. However, under some special cases, lenders provide loans up to seven years or if the total credit disbursed exceeds a specific level. Long tenure decreases your EMIs; however, it increases the overall pay out over the loan tenure, since the interest rates are high.
Additional charges: Apart from the principal amount and the interest rates, four-wheeler loan features a range of other expenses which you need to consider such as processing fees, documentation costs, part payment expenses, loan cancellation fees, foreclosure or pre-closure costs.
Some steps to follow while applying for the loan are –
Use the online eligibility calculator to check if you qualify for the credit
Decide the loan amount and stick to the same. Flexibility in this decision is not applicable
Compare the different loan providers. It is the most significant benefit of applying for loans online
Do not blindly choose the lowest EMI offer. Consider the total interest payout as well
Apart from the eligibility calculator. Lenders offer an EMI calculator as well to check the overall monthly amount payable towards the loan. Opt for the one that you are most comfortable with
If you have your eligibility figures, the car loan documents are in place, and the EMIs are within your financial range, then apply for one today!
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