Most cars in India are purchased through a car or automobile loan. How to Get a Car Or automobile loan? This is often the simplest option once you don’t have enough finance available directly . People in such cases choose a loan which may be repaid over Equated Monthly Instalments (EMIs) over a pre-defined term duration. However, before applying for car loans, we must understand the entire process so as to form the method faster and avail the loan with none hassles. Here may be a definite list of check points you’ll got to understand so as to urge a automobile loan in India:
1: Shortlist your Car:
Before going into the technicalities of the automobile loan , you want to first shortlist the car that you simply want to shop for . supported the make and model of the car, your loan are going to be sanctioned. Remember that for brand spanking new cars, lenders in India generally give out up to 85% of the ex-showroom price of the car because the loan amount. In certain cases, you’ll also receive up to 100% of the ex-showroom price as loan. This percentage is far lesser for pre-owned cars usually. Once you’ve got shortlisted your car, you’ll proceed towards automobile loan eligibility check.
2: Check your Eligibility:
Your eligibility amount for automobile loan would primarily depend upon the subsequent factors:
Make & model of the car
Total work experience also as work experience with the present employer
For self-employed individuals, the entire duration of the business will got to be provided
Proof of earnings
3: Choose the Loan Tenure, Loan Amount and EMIs:
Once you’ve got checked the eligibility, you’ll now choose the loan amount that you simply would wish and also use some automobile loan calculators so as to see different options available. In certain cases where you’ve got already provided certain deposit , you’d need lesser amount. you want to also choose the loan tenure supported the monthly instalments that you simply would be comfortable paying. you’ll also check the varied options available online for automobile loan EMI calculator. you want to carefully consider the loan amount, loan tenure and rate of interest of the automobile loan as these aspects will impact the general cost of the car and therefore the loan for you.
4: Negotiate for the rate of interest and Other Charges:
In most cases, automobile loan interest rates are fixed. However, you’ll negotiate for an equivalent supported your credit score, buying the car from a reputed dealer, and providing all necessary documents perfectly. You’ll also await a while if you think that interest rates will go down. The rate of interest is essentially the value that the lender levies on you for availing the advantages of financing the car for you. aside from this, you want to also check if there are the other charges.
Most of the lenders also levy processing fees. This ranges from about 0.4% to a quarter of the loan amount supported the lender that you simply have selected. it’s advisable to see the list of cars that the lender finances so as to avail the utmost benefits out of your car and therefore the overall loan deal. The interest that you simply would find yourself paying to the lender over the course of the loan tenure can actually be considered as a further cost of the car itself.
So, you want to lookout of this and add this aspect to the general cost of the car so as to return up with the particular cost that you simply would wish to incur over the course of your time . There are further costs involved in early closure or foreclosure also as part payment of the loan. you want to check these costs also just in case you’re getting to pay off the loan before the due period. Also note that there are not any tax benefits which will be availed on car loans in India.
5: Provide Relevant Documents:
You must keep the essential documents including ID, address proof, income proof, etc. ready. Once you submit the relevant documents that the lender has asked for, your process is nearly complete. Here may be a definite list of documents that you simply would wish so as to urge the loan sanctioned:
Any one from Aadhar card, passport, pan card, driver’s license , voters ID, etc. as identity proof
Any one from phone bill , electricity bill, Aadhar card, card , life assurance policy, passport, voters ID, driver’s license , etc. as address proof
Latest salary slips and form 16 as income proof
Self-employed individuals with sole proprietorship would additionally got to present latest tax returns and statement of last 6 months
Self-employed individuals with a partnership firm or private Ltd. or public Ltd. would additionally got to present audited record , profit & loss account from the last 2 years, company tax returns from the last 2 years, and statement of last 6 months
6: Book your Car:
Once you get the loan sanctioned, the lender will deposit the funds in your account. you’ll now visit the dealer to finish the payment and booking. so as to know how a automobile loan works, examine the points you ought to consider before choosing a automobile loan .