You have decided to buy a new car. You have gone on multiple test drives, and you have finally zeroed in on the car that suits you. Now you need a new car loan. With affordable EMIs, reasonable interest rates and hassle-free paperwork, more and more people are opting for a loan these days. With a car loan, the dream of having your own car is no longer far-fetched.
Before you head off to the bank to apply for a new car loan, you should know if you are eligible for a car loan and which documents you need to present to be granted a loan.
Are you eligible for a car loan?
Every bank has its own set of criteria through which they decide if you are worthy of being given a loan. They will want to look into-
• If you earn the minimum salary they stipulate to give a loan
• The yearly turnover of the company you work for
• The number of years for which you have been employed. If you are a salaried employee, you need to be employed for 2 years before you can apply for a loan.
• If you are self-employed, or in case of proprietorship partnership, your company should have a turnover of INR 300,000
Which documents do you need to produce to the bank authorities?
The documents that a bank will require depend on your source of income. You should consult your bank to get an exhaustive overview of the documents you might need. A bank wants to know if you have a good credit score to determine whether you would be able to repay the loan. Your income and your credit score also determine the interest rate that you will be charged.
Usually, these are the documents that you should have at hand if you are thinking of getting a new car loan-
• Proof of Identity (Aadhar, Telephone/Electricity bill, Passport)
• Proof of Address (Aadhar, Telephone/Electricity bill, Passport)
• Proof of Income (Bank statement for the last 6 months, Salary slip and form 16, Income Tax Returns for self-employed people)
• Passport sized photograph
• Signature verification proof
• Pro forma invoice
Post-sanction paperwork and documents-
The paper trail does not end with the loan being granted. The follow-up paperwork includes-
• The loan agreement signed and sanctioned
• Margin money receipt
• Standing Instruction or SI, Post-dated Cheques, ECS Form, Security Cheques for SI and ECS form etc
The documents that a bank needs proof that you are an Indian Citizen and that you are creditworthy enough to apply for a loan that you can pay back in due course. Do not hesitate to apply for a new car loan; it is about time you indulged in yourself and brought yourself that new car you had been longing for.
Before you head off to the bank to apply for a new car loan, you should know if you are eligible for a car loan and which documents you need to present to be granted a loan.
Are you eligible for a car loan?
Every bank has its own set of criteria through which they decide if you are worthy of being given a loan. They will want to look into-
• If you earn the minimum salary they stipulate to give a loan
• The yearly turnover of the company you work for
• The number of years for which you have been employed. If you are a salaried employee, you need to be employed for 2 years before you can apply for a loan.
• If you are self-employed, or in case of proprietorship partnership, your company should have a turnover of INR 300,000
Which documents do you need to produce to the bank authorities?
The documents that a bank will require depend on your source of income. You should consult your bank to get an exhaustive overview of the documents you might need. A bank wants to know if you have a good credit score to determine whether you would be able to repay the loan. Your income and your credit score also determine the interest rate that you will be charged.
Usually, these are the documents that you should have at hand if you are thinking of getting a new car loan-
• Proof of Identity (Aadhar, Telephone/Electricity bill, Passport)
• Proof of Address (Aadhar, Telephone/Electricity bill, Passport)
• Proof of Income (Bank statement for the last 6 months, Salary slip and form 16, Income Tax Returns for self-employed people)
• Passport sized photograph
• Signature verification proof
• Pro forma invoice
Post-sanction paperwork and documents-
The paper trail does not end with the loan being granted. The follow-up paperwork includes-
• The loan agreement signed and sanctioned
• Margin money receipt
• Standing Instruction or SI, Post-dated Cheques, ECS Form, Security Cheques for SI and ECS form etc
The documents that a bank needs proof that you are an Indian Citizen and that you are creditworthy enough to apply for a loan that you can pay back in due course. Do not hesitate to apply for a new car loan; it is about time you indulged in yourself and brought yourself that new car you had been longing for.
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