Today, buying a car is easy due to the ready availability of car loans. However, you might be wondering ‘how to get a car loan?'. A car loan facility disburses a certain amount of money on your behalf, and you must pay it back through EMIs within a predetermined time. Interest is usually applicable on a loan, and until the principal amount and the interest are fully paid, the lender has the authority to repossess your vehicle in case of default. How much car loan can I get is a question that every car buyer has. Read on to know more about car loans.
So, how easy (or difficult) is it to take a car loan? The safest and easiest way is to get it from a bank or a non-banking financial company (NBFC) like Mahindra Finance. Banks and NBFCs often have multiple car loan facilities, so you should choose one that meets your requirement. Above all, there are some specific criteria that you need to fulfil to get a car loan.
What are the criteria for getting a car loan in India?
Some things that bank and NBFCs consider while sanctioning a car loan are:
- Your ability to pay back the loan amount is paramount. Your CIBIL score, bank transactions, salary/income, and existing loan status will be checked thoroughly.
- Your intent to pay back the loan on time will also be ascertained
- The lender will validate the authenticity of your contact details - permanent address, phone number, email, etc.
- The model of the car you intend to buy also plays a role in deciding the amount disbursed.
- You should be aged between 21 and 60, though this can vary depending on the lender. To ensure that all these criteria are met, the lender will ask for some documents to be submitted in original, along with photocopies. The loan will be disbursed only to those individuals who can prove their ability and intent to repay the loan.
What documents are needed while applying for a car loan?
Here is a list of documents that you should keep handy while applying for a car loan:
- KYC documents (passport, voter's ID, Aadhaar card, PAN card)
- Salary slips, IT returns, etc.
- Proof of permanent address
- Rental address proof (if applicable)
- Documents of previous loan (if any)
- Copy of documents for an already owned vehicle (if applicable)
Do note that the submitted documents should be authentic and up to date. The lender will always perform a background check, so if you have had any dispute with a bank or NBFC in the past, be transparent about it. Do not suppress any information.
What loan amount am I eligible for?
Besides how to get a car loan in India, what loan amount am I eligible for is another common question that comes to the applicant's mind. Lenders may offer a loan that is 70%-100% of the vehicle's ex-showroom price. Still, the loan amount ultimately depends on the model of the car and your credit profile.
Are car loan interest rates negotiable?
Most of the time, interest rates for car loans are fixed and cannot be negotiated. However, if your credit score and reputation are excellent, you might be able to get a loan at affordable interest rates. Do bear in mind that interest rates fluctuate. So, keep an eye on the market and see how the interest rates move.
Sometimes, it may happen that your regular bank might offer you a preapproved car loan, which will make the entire process hassle-free. For further details, do get in touch with your chosen bank or NBFC.