The greatest car brands in the World jostle for space on Indian roads with the best models Indian manufacturing Companies can produce. Stiff competition between Indian and foreign brands can only be good for the Indian Consumer whose tastes are now comparable to his Western counterparts. So How Does One Avail Of Car Loans In India? Care To Know More. Just Read On.
So What Is A Car Loan?
Car loans or loans to purchase cars are available for people who want to purchase brand new cars. These loans are available for a wide variety of car models and for varying amounts. One can also take loans to make use of the pre-owned cars or the used car market. Cars generally need to be within three years of age and loans for pre owned cars depend upon the type of car used .Outdated models are frowned upon and no loan is sanctioned. One can also take a loan against the new car purchased. The new car purchased can be used as security for the loan.
What Are The Eligibility Criteria Required For That Car Loan?
Minimum age of 21 years is required for a person to avail of a car loan in India at the time of application of that loan, and up to 58-60 Years of age at the time of maturity of the loan.
The minimum income one needs in order to avail a car loan in India is 1.0 Lakh to 2.5 Lakhs per annum depending on which bank one takes the car loan from. The average quantum of loan sanctioned is 3-6 times the annual income.
A person can display as proof of income the income tax documents for salaried or even if one is self-employed. The latest salary slips attached with a Form 16 can also be used as an income proof. An Identify proof such as a Passport, Driving license, Pan Card, Voters Card, Ration Card, Telephone and Electricity bills are used as an address proof.
An updated last six months bank statement is required.
Should have a job for at least 2 Years and a minimum of a year with the current employer. Certain banks state that one has to have continuous employment of at least 2 Years with the current employer.
The interest on the car loan ranges from 10.5-12% per annum. It can go up to 16% depending on certain criteria.
The time period for repayment of that car loan is 5-7 Years with a processing fee ranging from INR 1500-2500 for a loan quantum of INR 3-8 Lakhs and up to INR 5000 for a loan of INR 10 Lakhs. The processing fee can be as high as INR 10000 for loan financing of cars above 10 Lakhs.
The loan margin for a new car is 15% and for an old car is 25%. This means on a new car of INR 5 Lakhs the applicant has to pay 15% of the cost of the new car mainly INR 75000 known as the down payment and the remaining amount of INR 4.25 Lakhs will be paid by the bank.
The maximum quantum of loan sanctioned is 40-50 times one’s annual income and certain banks sanction up to INR 1.5 Crores.
For a self-employed individual, the minimum amounts earned can be INR 60000-100000 per annum and he should be in business for at least 3 Years. He should have a landline at his office or residence. The turnover of the business should be around 5 Lakh per annum. Audited balance sheet and Profit & Loss Account for the latest two years serves as the income proof for a self-employed individual.
A luxury that one wants to afford after a nice home is a branded car. Owning a car makes one’s life comfortable. You can drive off to work instead of using crowded public transportation or use it for a leisurely weekend getaway.
Earlier, buying a car was a milestone in one’s life as one had to shell out a huge amount of money, but now one can simply take a car loan.