How to apply for a Car Loan? Car Loan Application procedure

How to apply for a Car Loan? Car Loan Application procedure

By Ankita Patil
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You can apply for a car loan by approaching your bank. You can visit the sales office of the bank or call the banking officer for an inquiry. In these days, applying for a car loan has become easy. Now, there are no major hassles in purchasing your dream car!

In India, car loans are the easiest way of buying cars. You have got an expected promotion and your salary has increased. And now, you are planning to buy the car you had been dreaming since last three years. Yes, the time has come! But instead of using your savings, you opt for availing car loan.

The first stage - Application

The most recommended approach for obtaining car loan is to apply to the bank where you normally have an account and conduct your banking transactions. It means it can be your salary account or even your savings account. It is most appropriate to apply in that bank. But if you want to check the other attractive schemes or interest rates of other banks, then you may surely approach other bank.

Generally, the purchase of car is in the form of a complete package: price of the car, discounts, accessories, insurance and obviously, the car loan component.

The second stage – Eligibility

In order to be eligible for availing car loan, the applicant must be between 21 and 65 years of age. He should be in employment of a company so that he can produce proper income and bank statements. If you are a businessman, then you must have the required tax returns for furnishing to the bank. You must be earning at least Rs. 2,50,000 in a year for applying car loan. If you are a non-resident, then you can apply for car loan as you must be having a bank account in India.

The third stage – Documentation

Lenders always check and evaluate your documents, whether it is personal or car loan. To get car loan from the bank, you must furnish following documents:

  • Bank account statements of the last six months
  • Identity proof – This can be your PAN card, voters’ ID card or passport.
  • Residential proof
  • Recent salary slips including deductions
  • Tax returns of the last two years

If all these documents and your credit score are found to be suitable, then the bank approves your car loan.

The fourth stage – Disbursal

You need to pay nominal processing fees for getting car loan. These charges vary from bank to bank. Mostly, banks issue loans up to 85% of the value of the car.

The Inevitable stage – Repayment

It must be noted that in case of car loans, there is nothing like the pre-payment charges. So, if you are having surplus funds, you can prepay the loan. As for repayment, you need to pay monthly EMIs as per timelines. If you are making numerous defaults in the loan repayment, then the bank or the lender may confiscate your car from you. Hence, the repayment stage is also significant for you.

Conclusively, car loans are the best and hassle-free ways of buying your brand, new car.

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2 COMMENTS

  1. In this fastest growing world and passion of cars among people has made the loan procedure in banks much easier than before. The introduction of the EMI facility has made people own a brand new car of their choice. This facility has come with advantages and also the drawbacks. The advantage is people need not to pay the whole amount of car at one go and drawback is they sometimes end up paying higher interest as well.

  2. Car loans are without any doubt the best way to buy a car. Instead of waiting and saving or borrowing from an unorganised source, taking the loan from the bank is always suggested. The only point to be kept in mind is the monthly method of payment should not lapse.

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