A person’s second most desirable dream after buying a grand house is to own a branded car. Of course, it is about comfort too. But the prime motivation behind making such an investment is the fact that your car will not let you put yourself through the hassle of public transport. Also, the weekend getaways!
But earlier, buying a car used to be a big dream for most people, given the cost. On the other hand, buying a car is just a loan away. Almost every bank today offers car loans and on attractive interest rates. Based on one’s affordability, it is, now, quite easy to take a car loan and then pay EMIs without really disturbing their budget.
Car Loan Interest Rates
One can avail a car loan on a new or/ as well as a pre-owned car. Although the interest rates may vary for new and pre-owned cars, they are more or less the same in all banks. Most banks have the interest rate for new cars swinging in between 9.25 and 13.13.75% and for old cars between 12.50 and 17.50%. Some major factors which help banks to decide on the loan amount and the rate of interest for different customers are as follows:
- Loan amount
- Borrower’s Salary
- Employment Category
- Loan Tenure
- Repayment Capacity
- CIBIL Score
Eligibility
There are certain eligibility conditions that should be met to be able to go for a car loan and one must make sure they have a proper understanding of that. Let’s see what are these factors that will decide if you are eligible to buy a car:
- Age
- Employment Type
- Minimum Annual Salary
- Minimum Credit Score
- Loan Tenure
- Loan to Value Ratio
EMI Calculator
EMI Calculator is a simple and smart tool to calculate the monthly amount payable to the lender (Bank). It’s basically a slider where you have to enter the values as per the Principal amount (P), Time duration (N), and Rate of interest (R). You can also try ClearTax Loan EMI Calculator to find out how much EMI you will need to pay every month and figure out your budget in advance.
Documents Required
| The following documents are required along with your Loan application: | ||
| Agriculturists | Salaried Customers | Businessmen – Professionals |
| Application form with photograph | Application form with photograph | Application form with photograph |
| Identity and Residence proof | Identity and Residence proof | Identity and Residence proof |
| Last 6 months bank statements | Last 6 months bank statements | Last 6 months bank statements |
| Processing fee cheque | Processing fee cheque | Processing fee cheque |
| Income Documents | ||
| Copies of Title Documents of Agricultural Land depicting Landholding | Latest Salary Slip | Educational Qualifications Certificate and Proof of Business |
| Copies of Title Documents of Agricultural Land depicting crops being cultivated | Form 16 | Business Profile and Previous 3 years Income Tax returns (self and business) |
| Statement of previous 2 years of loans availed | Previous 3 years Profit/Loss and Balance Sheet | |
Process of Applying
Car loans can be availed through different mediums. Either you directly go to the bank branch and enquire or you can apply online. The bank you choose will collect your documents and initiate the loan process which includes checking your CIBIL score, the value of the asset (vehicle), eligibility calculation etc. and then give a decision on your loan based on the evaluation results.
