How to Get a Loan For Car in India: Most cars in India are bought through car loans. Getting a car loan is one of the best option when you do not have sufficient finance available right away. In this situation people opt for a loan that can be repaid over Equated Monthly Instalments (EMIs) over a pre-defined term duration. However, we must understand the complete process before applying for a car loan so that we can avail the loan without any hassles. Here is a complete step-by-step guide on How to Get a Loan For Car in India.
What is Car Loan?
A car loan or a motor loan is a type of loan that allows you to purchase a two or a four wheelers for your personal use. There are various types of car loans available in the market such as two-wheelers loan, pre-owned car loan, etc.
How to Get a Loan For Car in India?
Do you want to apply for a motor loan? Then follow these simple steps to get a car loan in India -.
Step:-1 Select Your Car
Before approaching a lender for a car loan, you first need to select the car you want to buy. Based on the model and company of the car, your loan will be accepted. In India, lenders generally give out up to 85% of the ex-showroom price of the car as the loan amount. In some cases, you can get up to 100% of the ex-showroom price as a loan. Once you have selected your car, you can proceed for car loan eligibility check.
Step:-2 Check Eligibility Criteria
Before applying for a car loan you must meet these eligibility criteria mentioned below –
- You have to choose the car model and company.
- Applicants age must be between 18 years to 75 years.
- You have to earn at least Rs.20,000/- per month.
- At least one year of employment with current employer.
- Must be salaried or self-employed in government body or a private company.
Step:-3 Provide Required Documents
In order to apply for a car loan you must keep the basic documents such as address proof, income proof, etc. Once you submit the required documents to the lenders, your process is almost complete. Here is the list below of some required documents you need to get a car loan –
- Identity Proof (Aadhaar, PAN Card)
- Address Proof (Passport, Ration Card)
- Income Proof (Form 16, Salary Slips)
READ ALSO:- What is the Motor Insurance?
Step:-4 Decide Loan Tenure, Amount & EMIs
Once you have verified your eligibility, now you need to determine the loan amount you will need. In some cases where you have already paid a certain down payment, you will need a lower amount. You also need to determine the loan tenure based on the monthly installments that you are comfortable paying. You have to choose loan amount, tenure and interest rate carefully as these aspects will impact on you overall cost of the car and the loan for you. These are the simple steps on How to Get a Loan For Car in India.
Step:-5 Deal With Interest Rate and Other Charges
Most of the cases car loan interest rates are fixed. However, you can deal with the lender based on your credit score, documents, etc. Also you can wait for some time if you think interest rates will decreased. Basically, interest rate is the cost that the lender imposes on you for availing the benefits of financing the car for you. The interest you pay the lender during the loan term can actually be considered as an additional cost of the vehicle. You need to check all these additional charges and you also need to remember that there is no tax benefit available on car loans in India.
Step:-6 Finally Book Your Car
Once you get the car loan approved, the lender will deposit the amount to your bank account. Finally you can visit the showroom to complete the payment and booking. Thus, it is a step-by-step guide on How to Get a Loan For Car in India.