What is Car Loan ?
Auto loan also known as car loan are loans made by banks and other auto-financing companies to financially allow borrowers to purchase a car for private or commercial use. There are many car dealers and financers who have developed new schemes to help individuals make their dreams of owning a car come real.
These loan lenders have developed new and profitable car loan products to support new car owners. These products are usually offered at low interest rates to make them affordable for all divisions of society. Each one of these banks and financiers have a pre-set eligibility criteria and may vary from one another. The lump sum amount borrowed is repaid in easy installments.
Car Loan Eligibility Calculator
A car loan eligibility calculator is a tool that determines the loan amount a person is eligible to avail from the loan lending institution. The calculator helps an individual to get a preview of maximum percentage of loan amount that can be approved by the bank.
Depending on whether the car is new or used, value of the car and the maximum EMI applicant can pay, the maximum loan amount and tenure of the loan vary.
The loan amount approved by a banking institution depends on the loan term chosen for and the monthly income of the applicant. An individual can compare loan amounts and tenures offered by various bank, using the eligibility calculator. It saves the money and time lost in approaching every loan lending institution.
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Eligibility Criteria For Car Loan
The eligibility criteria for car loan differs from one lending institutions to another on the basis of borrower’s profile:
|Age||Minimum age of 18 years and maximum age of 75 years|
|Monthly Income||Minimum of Rs.10,000 per month|
|Employment type stability||3 years minimum for salaried or self-employed individual and 2 years minimum for business or current profession|
|Car manufacturer||Any approved Indian or foreign car manufacturer|
|Type of car||New or used|
|Place of residence||Urban, semi-urban, rural areas|
|Stability of residence||Minimum of 1 year stay at present residence|
|Pre-existing EMI amount||Depends on loan amount, loan tenure and interest rate|
Car Loan Eligibility Of Top Indian Banks
Car Loan Eligibility From SBI: Individuals aged between 21 to 65 years can avail the car loan from SBI and they must belong to one of the following 3 categories:
|Category||Income Criteria||Max. Loan Amount|
|State/central government employee, employee from private sector, private company or a reputed establishment||Net annual income of applicant and/or co-applicant if any, together should be a minimum of Rs.3,00,000/-||48 times of the net monthly income|
|Self-employed professionals, businessmen, partnership firms||Net profit or gross taxable income of Rs.4,00,000/-||4 times net profit or gross taxable income as per ITR after adding back depreciation and repayment of all existing loans|
|Person engaged in agricultural and allied activities||Net annual income of applicant and/or should be a minimum of Rs.4,00,000/-||3 times of net annual income|
Car Loan Eligibility From HDFC Bank
|Salaried||Self-employed Individual||Self-employed non individuals|
|Age||21<=60 years||21<=65 years|
|Income||Minimum income of Rs.1,80,000 annually, including income of your spouse||At-least 60,000 per annum for standard car and at-least 1,00,000 per annum for mid-sized and premium cars.||Minimum of Rs.60,000/annum for a standard car and Rs.1,50,000/annum for car loan|
|Income proof||Latest salary slip||Latest ITR||Computation of income and 2 years ITRs|
|Employment stability||Minimum 2 years and 1 year with current employer||At-least 2 years in business||Must have a minimum turnover of Rs.,4,50,000|
Car Loan Eligibility From Axis Bank
|Salaried||Self-employed Individual||Self-employed non individuals|
|Age||21-70 years||18-75 years|
|Annual Income||Rs.2.4 lac||Rs.1.8 lac||Rs.1.8 lac|
|Income Proof||Latest salary slip||Latest ITR||2 years of ITRs and audited financial of 2 years|
|Employment stability||Minimum 1 year of continuous employment||Minimum 3 years in same line of business||Minimum 3 years in same line of business|
Car Loan Frequently Asked Questions (FAQs)
- Visit car showroom and finalize the brand, model of the car of your choice. Know the price details of the car you want to buy.
- Check your eligibility for availing the car loan from the bank
- Acknowledge the details of the loan amount, EMI, duration and interest cost.
- Apply for a car loan in the bank by providing all the documents required for the car loan.
- Bank will take a few days to approve your loan
- After the loan gets approved you can book the car and take your dream car home.
The amount of loan you will be eligible depends on your age and income. Check the amount of car loan offered by SBI:
- Self-employed customers: customer can avail a loan amount 48 times of the net income earned in a month
- Employed customers with regular salary: 4 times gross taxable income of the person
- Customers engaged in agricultural activities: 3 times the net income of the person
The documents required for a car loan includes your income statement, past loan records, financial statements for the previous 2 years or six months transactions to check your credit score for a car loan.
Identity proof: PAN/ ADHAR/VOTER ID / PASSPORT
- Age proof
- Salary receipt / Income proof
- Address proof
- Bank account details
- Previous Financial statements
- Signature verification proof
The processing time of car loan may take 2 days or a week. Banks like SBI take 3 to 4 working days to dispose of your application for a car loan. The bank takes less time to verify your documents to approve a car loan.
You can best interest rate for a car loan in India. At present, the bank’s interest charges start from 8.85% per annum which is very less in comparison to other loans. Central Bank of India and SBI are the best bank for a car loan in India. They charge around INR 1600 to INR 1800 interest in a year. HDFC Bank, ICIC Bank are also the best options for taking a car loan in India.
Yes, it is necessary to have a bank account from which you take a loan from some banks. It is for the purpose to check your income and past loan history your eligibility getting a car loan. Bank and the company verify your bank status, previous dues or loans, income from your bank account to approve your car loan. It makes the transactions and repayment of loan easier to get tracked by the bank. Most of the banks prefer to sanction the loan of the bank account. The EMI of the loan is reduced from your bank account every month. However, you can also pay your EMI through checks or cash to the bank in case you don’t have sufficient balance in your bank account.
Yes, it is good to take a car loan in India. The concept of a car loan is trending in the financial market in India. Everyone wants to buy their dream car. Having a car in India symbolizes of status and luxury in Indian society. People from middle-class family and employees who have fewer savings and income often face problem to afford a car. The banks offer an easy car loan to every type of customers after varying their income and loan repayment ability. The agents of the banks linked with the car showrooms will help you to get a loan instantly. A car loan is also preferred by rich customers as they don’t have to spend the entire amount at once. You can easily pay the loan on installments with a low-interest cost. During festivals and financial year ending companies offers attractive discounts and benefits on car loans. Car loan has fulfilled dreams of every Indian to ride their own dream car home.
There are equal advantages of car loan as well a disadvantage of taking a car loan. In general, nobody wants to take a burden of a loan in their life. Taking a car loan leads to payment of interest with EMI which is more than the actual value of the car. Taking a car without a loan will give a lot of benefits when u can to resell your car at a higher value. You can enjoy your car rather than bothering about the repayment of a car loan. After taking a car loan your entire budget will get hampered for paying the EMI every month. Nobody wants to pay an extra amount for the car unless you can’t afford the whole amount at once.
It is better to get a car loan from a bank rather than a dealer. It is the safest and secure mode of taking a loan in India for the car. Banks offer you attractive schemes for a car loan for every type of customers. An SBI Car loan offers additional benefits and discounts for senior citizens and government employees. Most of the banks provide easy car loan for government employees with the minimum down payment. You can also take a car with zero down payments during festival offers on car loans. Banks charge a low-interest rate compare to other financial institutions. You can pay your EMIs on installment for car loan according to your income and convince. You get sufficient time to repay your loan in India without any troubles by broker. At present the lowest interest rate charged by private banks in 8.85% per annum that amounts to 1 lakh rupees in a financial year which will continue for 7 years duration. Getting a car loan from Bank reduces the financial burden on the buyer to purchase their dream car.
You can pay your EMI for a car loan through your bank account. Your EMI amount will be deducted from your account in the first week of every month by the bank automatically. You can also pay your EMI through check or cash according to your continence. Remember to pay your EMI regularly on time. Overdue of EMI can charge you an extra 2% of the EMI amount.
You can also prefer Pre-payment of your EMI before completion of the tenure of the EMI. The Pre-payment can be done in two modes by partly or fully. You can pay your outstanding loan or EMI before time. It will help to reduce your burden of the loan. It reduces your EMI and the interest amount on the loan. Some banks don’t allow pre-payment as it causes them a loss of the interest of the EMI. Taking a lower EMI and then pre-paying the loan is not a good idea if you can afford the surplus amount. Some banks do charge a small amount for pre-payment.
Yes, you can reduce or change EMI according to your convenience. You can take EMI for a longer period of time or shorter duration. It depends on your capacity to pay the loan and bear the interest on the loan. Reducing your EMI will help to reduce your burden and interest on the loan amount. You can quickly pay your EMI to the banks and save money.
Yes, you can get a loan to purchase a used car. The interest rate for a loan over a used car is quite higher than the interest rate for a new car. It is better to take a new car with that loan. You can get a loan up to 45 lakhs for used cars. SBI Car loans provide 12.6% car loan interest at present followed by ICIC Bank car loan 10.50%, Kotak Bank 17.00 on the interest rate. Banks do offer car loans for second-hand cars and new cars to their customers. Visit your bank branch or the official website of your bank to know the details of the procedure before applying for a car loan.
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