So what is a car loan?
Car
loans are available to people who want to purchase brand new cars. These loans
are available for a wide variety of cars 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 .One can also take a loan against the new car
purchased. The new car purchased can be used as security on the loan.
What
Are The Eligibility Criteria Required For That Car Loan?
- ·A 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 has to have in order to avail a car loan in India is 1.0 Lakhs to 2.5 Lakhs per annum depending on which bank one takes the car loan. The average quantum of loan sanctioned is 3-6 times annual income.
- · A person can display as proof of income the income tax documents for salaried, self employed or even if one is a farmer. 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 Car, Telephone and Electricity bills 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 a continuous employment of at least 2 Years with the current Company.
- · 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 ones 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 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 latest two years serves as the income proof for a self employed individual.
