Online
Most lenders provide the option to apply for a car loan online. You will need to visit the official website of the lender to apply for a loan. The process to apply for a car loan is simple and the documents can be submitted online. In case your credit score is good, lenders may provide pre-approved car loans. In such cases no documents need to be submitted as well.
Offline
You can visit the bank branch and apply for a car loan. The relevant documents need to be submitted. Once the verification process has been completed, the loan will be provided.
The car loan elegibility criteria can be different for different banks. The common criteria are as follows:
- Age of the individual must be between 18 years and 75 years.
- Minimum net monthly income of Rs. 20,000.
- At least one year of employment with the current employer.
- Must be salaried or self-employed, working for a government establishment or a private company.
To prove your eligibility, you''ll need to provide certain documents. Though this too is specific to different lenders, the common documents will be:
The Equated Monthly Installments (EMIs) that you will pay will depend on a few key factors.
- The loan amount.
- The interest rate that is applicable to the loan.
- The tenure of the loan.
- The processing fees.
The higher the loan amount, the higher your EMI will be. Similarly, the shorter the loan tenure the higher the EMI. To find the best compromise between an affordable EMI and duration you should check out our car loan Calculator
When it comes to car loans in India, in general, the following features and benefits are offered. Note that the following is a generalised look at the advantages offered by car loans. Individually, car loan lenders may have highly customized and specialized offerings for their customer base.
- It helps you purchase a car even if you don''t have all the money for it right now.
- Most car loans will finance the on-road price of the car.
- Some car loans will even finance 100% of the on-road price. This means no down payments.
- With some banks offering financing in the crores, you are not limited in your choice of cars
- Most car loan offerings in India are secured loans. This implies that the car serves as the security/collateral for the loan.
- Procuring a car loan is usually simple when compared to other loan products. Individuals with slightly unsavoury credit scores can also hope to procure one. However, this option differs from bank to bank.
- Car loans in India often offer fixed interest rate options. This means you are always assured of a fixed amount that needs to be repaid monthly.
- Many lenders will offer interest rates based on your credit score so a high score to get you a cheaper loan.
- Car loans are not meant for just new cars. A used car loan can help you buy a pre-owned car.
Types of Loans:
There are many different types of loans available, each with its own purpose, features, and requirements. Here''s a breakdown of some common categories:
Secured vs. Unsecured:
- Secured loans: Require collateral, meaning you pledge an asset (like a house or car) as security. If you default, the lender can seize the asset. Secured loans often have lower interest rates. Examples: mortgages, auto loans, home equity loans.
- Unsecured loans: No collateral required, based on your creditworthiness and income. Typically have higher interest rates. Examples: personal loans, credit cards, student loans.
By Purpose:
- Debt consolidation loans: Combine multiple debts into one monthly payment.
- Home loans: Finance the purchase or refinance an existing home.
- Auto loans: Finance the purchase of a new or used car.
- Student loans: Cover educational expenses.
- Business loans: Fund business operations, expansion, or equipment.
- Medical loans: Pay for medical bills or procedures.
Other types:
- Payday loans: Short-term, high-interest loans often used for emergencies.
- Title loans: Use your car title as collateral for a short-term loan.
- Pawn shop loans: Borrow money using personal belongings as collateral.
Who Needs Loans:
Many people need loans for various reasons:
- Individuals:
- Major purchases: Homes, cars, education, medical bills.
- Debt consolidation: Manage multiple debts more effectively.
- Emergencies: Unexpected expenses like car repairs or home renovations.
- Investments: Starting a business, investing in real estate.
- Businesses:
- Start-up capital: Launch a new business venture.
- Expansion: Grow existing operations.
- Inventory or equipment: Purchase necessary resources.
- Cash flow management: Cover temporary shortfalls.
Remember, borrowing money is a significant financial decision. Before taking out a loan, carefully consider your needs, repayment ability, and the terms of the loan. It''s important to shop around and compare offers from different lenders to find the best option for your situation.