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Factors affecting your Eligibility for a Auto Loan
For a hassle free loan process, ensure you are up to the mark on each of these parameters
Monthly Income
A bigger pay-cheque can mean a bigger car. Your income is the key factor in determining your car loan amount.
Age
People with ages between 18 and 65 years are eligible for car loans across various lenders in India. However, different lenders may have different age policies.
Car Value
The car’s value affects the eligible loan amount. Loan amounts are typically about 85 – 90% of a new car’s road price and about 80% of a used car’s valuation.
Credit History
A good credit history can make getting a car loan a breeze. A CIBIL Score of over 750 will put your dream car loan on the fast lane of disbursal.
Employement Status
As a Salaried person, you must have have worked at least for 2 years with your current employer, to become eligible for a car loan
Self-Employement Status
It is preferable that self-employed professionals or businessmen have been engaged in the same line of business for a minimum of 2 to 3 years.
Relationship with bank
Your relationship with the bank can go a long way in increasing your loan amount eligibility at a reduced interest rate.
Employer Quality
If you work with one of the Fortune 100 companies of India, your loan eligibility will increase, as banks will regard your job stability as good.
Reduce Your EMI Burden
Your EMIs Need Not Be So High! Trim Your Monthly Burden Using Balance Transfer Options Suggested By Our Experts.
A car is a dream that many of us wish to achieve one day, right. In the present scenario, buying a car has become easier as more and more lenders are coming up with a slew of easy and attractive financing options to appeal the customers. Unlike earlier when only a few elite class used to have the privilege of owning a car, today even an individual with a salary of say Rs. 15,000-20,000 can also buy the 4-wheeler. This has been made possible due to the repayment of the loan in the form of equated monthly installments (EMIs), which constitute a portion of interest and principal payable each month from your pocket. Not only new cars, but even a used vehicle can also be bought on a loan. However, the repayment tenure can vary in each of the cases. The maximum loan tenure for new cars is seven years, while for used cars it is 5 years. Any individual, be it salaried, self-employed businessmen or professionals with a regular source of income can avail a car loan from banks and non-banking finance companies (NBFCs) across India.
Car Loans Interest Rates
Needless to say, the most vital factor that you must look into is the interest rate on your car loan. Higher the interest rate more will your pocket pinch and vice-versa. Interest rates are determined based on the lending rates of the lender. Car loan interest rate can either be fixed or floating. With fixed rate, the rate of interest remains the same and changes when the loan is given on a floating rate. All floating rate car loans are subject to revision of MCLR by banks from time to time. The floating rate can thus be an add-up of the MCLR or the same. You can check below to find out the interest rates of different lenders.
| Lenders | Loan Tenure | Interest Rate | Per Lac EMI | Max. Loan Amount | Processing Fee | Foreclosure Charges |
|---|---|---|---|---|---|---|
|
State Bank of India (SBI) |
7 years for new car
5 years for old car |
9.20%-9.25% p.a. for new car
12.65% p.a. for old car |
Rs. 1,619-1,622 for new car
Rs. 2,257 for old car |
Upto 85% of the on-road price for new car
Upto 2.5 times of net annual income for old car |
NIL for new car
0.50% of the loan amount plus GST for old car
Minimum- Rs. 450 + GST
Maximum-Rs. 9,100 + GST
(100% Waived Off Till 31st December,2017) |
NIL |
|
HDFC Bank |
7 years for new car
5 years for old car |
11.50%-13.75% p.a. for new car
14.50%-17.50% p.a. for old car |
Rs. 1,739-1,860 for new car Rs. 2,353-2,512 for old car |
Upto 90%-100% of on-road price for new car
Upto 80% of the valuation of old car, limited to 3-6 times of your net annual income |
Rs. 2,825-5,150 for new car
2% of the loan amount plus Rs. 200 or Rs. 5,200 whichever is lower for old car |
3%-6% of the principal outstanding on a given date.
No foreclosure allowed before 6 months from the date of loan disbursement. |
|
ICICI Bank |
7 years for new car
5 years for old car |
10.75%-12.75% pa. for new car
15.50% p.a. for old car |
Rs. 1,699-1,806 for new car
Rs. 2,405 for old car |
Upto 100% of ex-showroom price of new car
Upto 80% of the valuation of old car |
Rs. 2.500-5,000 for new car
2% of the loan amount or Rs. 6,000, whichever is lower, for old car |
5% of principal outstanding on a given date.
No foreclosure allowed before 6 months from the date of loan disbursement. |
|
Axis Bank |
7 years for new car
5 years for old car |
11.00%-12.00% p.a. for new car
14.50%-16.25% p.a. for old car |
Rs.1,712-1,765 for new car
Rs. 2,353-2,445 for old car |
Upto 85% of on-road price of new car
Upto 90% of valuation of old car |
Rs. 3,500-5,500 for both new & old cars |
5%-10% of the principal outstanding after 180 days from the date of disbursement.
No foreclosure allowed before 6 months from the date of loan disbursement. |
|
Kotak Mahindra Bank |
7 years for new car
5 years for old car |
11.50%-13.50% p.a. for new car
15%-21% p.a. for old car |
Rs. 1,739-1,846 for new car
Rs. 2,379-2,705 for old car |
Upto 90% of the ex-showroom price of new car
Upto 90% of the valuation of old car |
As applicable by the bank |
5.75% of the principal outstanding plus GST |
Car Loan Eligibility Criteria
Car Loan Eligibility simply means the amount of loan that you can get to buy your dream 4-wheeler. Different lenders set different eligibility criteria for the approval of car loan application. Below is a table to know the common eligibility criteria of car loan across the lenders in India.
| Parameters | Salaried | Self-employed |
|---|---|---|
|
Age |
Age should be between 21-60 years |
Age must be between 21-65 years |
|
Income |
A minimum annual income of Rs. 1,80,000 is required |
A minimum annual income of Rs. 1,80,000 is needed |
|
Job/Business Status |
Work experience of atleast 2 years with a minimum of 1 year with the current employer |
A minimum of 2 years in the same line of business is needed |
Factors Affecting Car Loan Eligibilitys
- Monthly Income – Monthly salary or business income is a vital factor that decides the limit upto which you can get the loan to buy a car. You always have a good chance of getting more loan on a higher monthly income.
- Age – Car loan eligibility is based on age as well. Even though the age criteria differs across different banks and NBFCs, but usually the lenders give loan to people with an age of 18-65 years
- Car Value – The loan amount eligibility also hinges on the car’s road price (Ex-showroom price+RTO+Insurance+Accessories, if any). Banks disburse car loan at about 85%-90% of the on-road price. If you are buying a used car, then the loan amount eligibility will be about 80% of the valuation of the vehicle as assessed by the valuation officer appointed by the lender. But make sure you do not buy a car with over 4-5 years in use as most of the lenders will be reluctant to finance on such vehicles.
- Car Model Type – Your loan amount eligibility can be influenced by the model you opt for. As car is a depreciating asset, banks can give you a higher loan for a vehicle having a greater resale value compared to the one with a lesser resale value
- Credit History – Credit history is vital to the approval of your car loan application and subsequent disbursal. You may have a good earning but your poor credit history can make you ineligible for a car loan. So, make sure you maintain a good CIBIL score preferably 750 and above to get the car loan approved from most lenders.
- Employment Status for Salaried – If you are a salaried professional, you must have worked for atleast 2 years with a year of experience with the existing employer for a smooth car loan approval.
- Business Longevity for Self – employed-Self-employed professionals or businessmen will have to be in the same line of business for a minimum of 2-3 years to get the nod for a car loan.
- Relationship with Lender – You can take advantage of your good relationship with the lender to negotiate for a loan at competitive interest rates.
- Category of Your Employer – If you working among the top fortune 100 companies of India, then your loan eligibility will increase as banks will view your job stability to be good there. In the absence of the same, it is vital that you earn reasonably higher so as to get the desired amount of loan from the lender.
Documentation
| Proofs | Salaried | Self-employed |
|---|---|---|
|
Age & Identity Proof |
Passport Copy/PAN Card/ Voter ID card, Photo Driving License with birth date (laminated, recent, legible)/Photo ration card with DOB/Employer certificate/ID/School/College Leaving Certificate |
Passport Copy/PAN Card/ Voter ID card, Photo Driving License with birth date (laminated, recent, legible)/Photo ration card with DOB/Employer certificate/ID/School/College Leaving Certificate |
|
Income Proof |
Form 16 for last 2 years, Latest Salary Slip, 6-month bank statement |
IT returns for the last 2 years along with audited balance sheet, P&L account statement for 2 years, Shop & establishment act certificate / sales tax certificate / SSI registered certificate / copy of partnership |
|
Residence Proof |
Latest Telephone Bill/ Electricity Bill/Property Tax Receipt/Passport/ Voter ID |
Latest Telephone Bill/ Electricity Bill/Property Tax Receipt/Passport/ Voter ID |
|
Signature Verification Proof |
Passport copy/PAN Card |
Passport copy/PAN Card |
|
Passport Size Photographs |
Applicable |
Applicable |
Features & Benefits
- Funding available upto 80%-100% of ex-showroom or on-road price of the car
- Loan amount available upto 80% of the valuation of old car
- Easy Documentation
- Fast Processing
- Flexible Repayment Options
- Hassle-free & Transparent Process
- Quick Approval
How to Apply for Car Loan?
You can apply for a car loan through various mediums ranging from going online to visiting the nearest branch of the lender. Of the options available at your disposal, the best would be to apply online as it is easy to execute. All you require is to visit the official website of a bank or NBFC. You can find the link of ‘Apply for Car Loan’ at a specified point of the website. Click the link, submit the required details along with a scanned copy of the relevant documents for the processing of your car loan application. Other ways would be to submit your loan application form and the required documents at the bank branch. The moment you do so, the lender will start investigating the details and assessing your eligibility for a car loan. If everything goes fine, you would be greeted with a hassle-free loan disbursal to buy your dream car.
FAQ (Frequently Asked Question)
An auto loan is a secured loan specifically for purchasing a vehicle. The vehicle serves as collateral for the loan, and the borrower repays the loan over a fixed term through monthly payments.
You can finance new or used cars, trucks, SUVs, motorcycles, and sometimes recreational vehicles like boats and RVs.
Interest rates vary based on factors such as your credit score, loan term, and the age of the vehicle. Contact us for current rates and personalized quotes.
To qualify, you generally need to provide proof of income, a good credit score, and proof of identity. The vehicle you intend to purchase will also need to meet certain criteria.
The loan amount depends on your income, credit history, and the value of the vehicle. Typically, lenders finance up to 80-90% of the vehicle’s value.
Loan terms typically range from 24 to 84 months. Longer terms may lower your monthly payments but could result in higher overall interest costs.
Yes, getting pre-approved can give you a better idea of your budget and streamline the purchasing process. Contact us to get started with pre-approval.