Know About Your Car Loan:

A car loan is a type of financing that allows individuals to purchase a vehicle by borrowing money from a financial institution. This form of secured loan typically involves the borrower making a down payment and repaying the borrowed amount, along with interest, through monthly installments over a specified period. The car serves as collateral for the loan, and once the repayment is complete, ownership of the vehicle is transferred to the borrower. Car loans provide a convenient and structured way for individuals to acquire a vehicle without the need for a large upfront payment. Terms, interest rates, and eligibility criteria may vary among lenders.

Car Loan Eligibility for Salaried Individuals/Self-Employed Individuals

For salaried individuals

  1. Individuals who are at least 21 years old at the time of loan application and no older than 60 at the end of the loan tenure

  2. Individuals who have worked for at least two years, with at least one year with the current employer

  3. Individuals with a minimum earning of Rs. 3,00,000 per year, including the income of the spouse/co-applicant.

For Self Employed Individuals

  1. Individuals who are at least 21 years old at the time of application and no older than 65 at the end of the loan tenure.

  2. Those who have been in business for at least two years.

  3. Should earn at least Rs. 3,000,000 per year

Factors affecting Car Loan Eligibility

  • Credit Score
  • Income
  • Employment History
  • Age
  • Debt-to-Income Ratio
  • Loan Amount
  • Loan Tenure
  • Work Experience (For Self-Employed)
  • Credit History
  • Location

Documentation for Car Loan

You will be asked to submit papers suggested by your lender to show your eligibility and competence for a Car Loan. To begin the loan procedure, keep the following documents on hand to obtain a loan as soon as possible.

List of Documents Required

  • KYC documents (Valid Photo ID Proofs)
  • PAN Card
  • Last 2 years’ ITR as proof of income
  • Salary Slip (latest 3 months)
  • Salary account statement(latest 6 months)
  • Signature Verification Proof



FAQs

What is the loan amount I can get?

Insure Borrow Safe provide 80% - 90% of the showroom price of the car. The rest which includes the rest of the car price, road tax registration extra need to be covered by the borrower.

What is the tenure or loan period?

The tenure offered by most lenders is 1-5 years but in some special cases the tenure could be extended to a maximum of 7 years. It is best to pay off the loan as quickly as possible as cars have depreciation as time goes by and you will pay more than its cost. But if you want to reduce the EMI then opt for the longer tenure.

What are the documents that are required to avail a car loan?

The documents that need to be submitted are - Age proof, ID proof, Application form, Photograph, Residence proof, Income proof, Bank statement, Signature verification proof, Pro-forma Invoice or Rate List.

What is the processing time for the car loan?

Usually it takes banks at least a week to process and application which will include background verification and loan amount disbursal. It may take some additional time if the bank and its employees/agents are tied up with a lot of applications.