Car Loan in India, Calculate Car Loan EMI
Important things to keep in mind before applying Car loan, Apply Car loan, Compare Car loan interest Rates
Car Loan: Owning a vehicle has become necessity in today’s scenario. Most of the people wish to have a their own conveyance. This sometimes becomes a need due to problems being faced while travelling in public transport especially to women and children. Buying a car is now so easy that almost every 2nd person in the city and 5th in the village, has a car. Thanks to car loans and lenders available in the Indian market which is sort of a boon to people to own a car as well as to the automobile industry.
There are many car loan lenders in the Indian market. Most of them are directly associated with the company which is selling cars. Hence easier to reach to the customer.
Buy New MG Hector despite having low budget
Read about Improve Credit Score, How improved CIBIL help
Public sector banks (Govt Bank), Private banks, Non Banking Financial companies (NBFC) and even Automobile companies are financing cars. Car Loans are available to purchase a new car as well as old car. However there are conditions to avail second hand car loans which differs for every bank or company.
To buy a new car, a person has options either to go to a bank where he/ She is having a running account, go to another bank/ NBFC or to avail directly from an automobile company.
Car loan interest rates:
The major difference in availing car loans from banks and other institutions is interest rate. The NBFCs and automobile companies usually charge higher rates of interest up to 15% whereas banks interest rate is presently in 2022 ranging between 7-9% per annum.
Eligibility to purchase a car is usually decided based on the income of the person who is buying the car. Many lenders provide 90% loan of the on road cost of the car.
Read How to make Complaint against Bank with Bank Ombudsman
Documents required for a purchase a new car on loan
Very less documents are required to avail a loan for new car which includes the following (May differ in various institutions)
- Before availing loan
- KYC documents of the person who is buying a car.
- Income documents (like ITRs, Form 16, Salary slips/ Balance Sheet).
- If you are availing car loans from different banks/ institutions, you need to submit a bank statement of the running account).
- Recent photographs.
- Proforma Invoice of the car to be purchased.
- After buying car you need to submit following documents to the lender
- Registration Certificate
- Insurance copy of car
- Invoice of the car
- Some lenders may ask for a key to the car which they return after the closing of the loan.
Learn How Public Provident Fund is a best tool to Save Income Tax
For how many years bank finance car loans
Usually a car loan has a tenure of 5 years during which the customer has to pay loan principal and interest amount in equated monthly instalments (EMI).
How to avail loan on used car
To avail car loans for used cars is a little tedious process. The lenders generally ask for the present value of the car being purchased, for which the valuation vendors charge a fee. After getting a valuation, the lender decides the loan quantum which is based on the present value of the car and income of the person who is buying the car.
In some cases, a used car which is not older than 6 months – 1 year, can be considered as a new car and a new car loan scheme is applicable in that case.
Know 15 Tips and Tricks to save income Tax
Documents required to avail used car loan –
- KYC of the seller as well as buyer of the car
- Income documents of the purchaser
- Photographs of the purchaser.
- Original Bills, valid insurance and registration certificate of the car.
- Valuation for obtaining the present value of the car.
- If the original purchase is done through loan, then the running loan of the car must be closed before second purchase as registration can not be transferred if hypothecation is marked with the registrar.
As time has changed and fuel is costlier, automobile companies are launching cars which are running on electricity and biofuels.
Subsidy on car loans
If one purchases an electric car, the government is issuing subsidies on every purchase. The subsidy amount is up to 40% of the cost of the car. More info is available on the link https://e-amrit.niti.gov.in/electric-vehicle-incentives.
There are many websites, comparing car loans to get cheaper rate of interest and time involved in the process of loan. However it is always a better option to avail car loans from the bank where you have a running bank account.
How many car loans banks can finance to a person
There is no limit set by banks about this. One can avail as many car loans from banks. However, the applicant has to fulfil the criteria of the lender. The lender may also ask you about availing more than 2 or 3 car loans. But this enquiry is made to ascertain whether the borrower is genuine or not. The lender will also check your credit score. Know more about how to improve credit score.
Click to read All Government Schemes in India
Lastly, I would suggest you to gather information about rate of interest and process before availing a loan for this purpose from any lender.
Other Posts:
- Personal Loans, advantage and disadvantage
- Improve Credit Score, How improved CIBIL help
- What does -1 CIBIL score mean
- Unsecured Business loans in India
Read Category-wise posts
Banking | Bank Account | Bank Deposit Schemes | Loans | Bank Cards | Credit Cards | Debit Cards | Search IFSC & MCLR Code | Insurance | Bank Jobs and Exams | Stock Market | GST | EMI Calculator
