Car Loan Overview

There was once a time when having an automotive was a luxury, not all may afford to own. Shopping for an automotive was a life milestone for everybody UN agency may dispense those immense amounts of cash all directly to shop for their dream automotive. With growing times, dynamical demographics and rising consumer loan lenders, for a majority of the Indian bourgeoisie, owning an automotive nowadays isn’t any longer a luxury, however in reality a necessity created doable by taking a consumer loan.

Can you imagine living without an automotive, which may result you to giving up on going to places for work, duties or leisure, preventative an honest social and career. However, with newer technologies and lesser resources, the price of cars are on an increase, usually creating it extraordinarily tough for the typical individual to buy their vehicle outright hence disturbing ones savings. Therefore, viewing the large demand for funding each used and new cars, leading loan lenders in India supply automotive loans, that are floated merchandise, that change you to buy your automotive and pay off the consumer loan quantity borrowed bit by bit through consumer loan EMIs or installments.

Benefits of automotive Loans in India:With the exception of the problem that paying such an enormous total of money could disturb one's budget, large purchases with liquid money may place you on the revenue enhancement department's measuring device further. Once you get a consumer loan to procure your automotive, you manage to retain your savings for different current and future expenses. One amongst the best consumer loan advantages in India is that the loan is secured against the automotive itself. So, you are not going to have to be compelled to mortgage your property or different assets to urge a consumer loan. Furthermore, you might get to use your automotive while you're completing the consumer loan term, therefore many years down the road you get an amount additional to your original savings and have the chance to have the automotive having paid off your consumer loan easily. This provides you the possibility to enhance crucial credit history by procuring a consumer loan and strictly adhering to the compensation cycle. An honest credit history as well as timely payments and cleared debts assist you acquire additional loans within the future. Therefore car loans are a really safe and bound means of buying your own automotive.

Now you can compare interest, processing fee, tenure and max. Loan offers, of all the banks before choosing your desired loan.

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Features of Car Loan

All loans are not created equal, Car loan has become a great option for people to use.

First and foremost, it is immensely pocket friendly. It is obvious that a second-hand car will cost less.

It is evident that the demand for second hand car loans is lesser that that for a new car loan.

And the best part, in case of a pre-owned car, the choice of models isn't dependent on its current on-road price.

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Comparision Of Car Loan

compare Car loan interest rates by banks

# Providers Interest Rate Processing Fee
1 SBI Car Loan 12.55%-17.65% 1%-3% of the loan amount + applicable Service Tax
2 Axis Bank Car Loan 11.25%-24% 1.50%-2.00% of the loan amount + Service Tax, as applicable
3 ICICI Car Loan 11.29%-22.00% Upto 2.50% of the loan amount + Service Tax, as applicable

Documentation needed to apply for a Car loan:

Several documents that establish necessary information like your identity, proof of income and residence are required for a car loan application. But out of all, the documents relating to new or old car, are the most important. The complete set of relevant car loan documents makes one eligible for loan and one cannot do without submitting the right docs.Though, the documentation requirements vary from lender to lender, following is a list of commonly asked for documents required while applying for a car loan :

Documents for Salaried Individuals:

 Latest 3 months' salary slips

 Form 16 with proper computation of income

 Salary account bank statement for six months

 Latest acknowledged IT return

 Business stability and ownership proof

 Last two years' computation of income

 Profit and Loss statement

 Balance sheet certified by a C.A.

 Latest six months' bank statement

 Last two years' sales

 Copies of acknowledged IT returns

 PAN Card for the lender to check and verify if you are trustworthy enough to make regular repayments by your credit records history.

 Documents providing Vehicle information which may include the sales receipts from the seller.

 In order to establish that, all applicable laws and protocols are followed with regards to the purchased vehicle, the applicant must also submit copies of the Vehicle's Motor Insurance and your Driving License.

Documents for Self-Employed:

 Duly signed and filled application form available either on the website or physically at the bank's outlets

 Passport Size Photographs, generally 4-6 photos

 An identity proof which can be one of these documents- Passport, Pan Card, Driving License, Voters ID card, Aadhaar card or employee identity card in case of government employees

 Address Proof like Bank statement, Rent Agreement, Voters ID card, Ration card, Passport, Driving License, Telephone bill, Electricity or water Bills, Credit card bill or Property tax document

 Age Proof which may be a Voter ID card, Secondary school leaving certificate (class 10), Birth certificate, Passport, Aadhaar card, Pension payment order or Receipt of LIC policy.

Frequently Ask Questions

If you have a question that deals with clients, customers or the public in general, there is bound to be a need for the FAQ page.

We can compare the best offers from various banks and apply online within no time. we will be approached you to process the loan as per your eligibility.

A lot of financial institutions offer up to 90-95 per cent of the car value as auto loan. However, the final value might vary with lender. They check factors such as vehicle cost, type and value in second hand market while deciding the amount of loan to offer. Some banks might even lend 100 per cent of the car value.

Like any other product, you would require to submit your identity, address and income proofs along with the loan application. After submission of the documents, it takes about 2-3 days for processing the loan and getting it sanctioned.

Yes, interest rates for car loans are not fixed. They can be negotiated. If you are loyal customer to a bank and have made regular payments for previous loan(s), they might consider and revise the existing interest rate for you.

There are two types of interest rate offered - fixed and floating just like a home loan. You can choose the bank which offers the one you need.

Typical tenures for car loans range from 1-5 years. You can opt for a lower tenure loan if you can service a higher EMI (equated monthly instalment) or a higher tenure loan if you cannot afford high EMI. Some lenders also offer loan tenure up to 7 years.

There are chances of your loan application getting rejected if you have a bad credit score. This might happen if you have applied for loans/credit cards multiple times, defaulted on EMI payments, etc. If this is the first loan application, other factors such as income, organization, etc. will be considered.

You can pay EMIs either through post-dated cheques or request the bank to debit your account every month through ECS (electronic clearing system) option. In car loans, though you are not allowed to make part payments, you can pre-pay the entire loan after 6 months to 1 year. However, make sure you check with your bank upon this rule. If you pre-pay before this period, there will be a penalty of 2-4 per cent on the outstanding amount.

You need to make EMI payments regularly. Most of the banks allow you to miss one or two payments. However, beyond that you may be treated as a defaulter. They would have the authority to seize your vehicle. Also, in case you default on the payment, your credit score will also take a hit and reduce your chances of loan eligibility in the future.

Yes, financial institutions offer loans to purchase used or second-hand cars. However, interest rates would be slightly higher for such vehicles. Other factors such as repayment capacity, car value, etc. would be considered as they do for a new vehicle.