What kinds of interest rates are typical?
Depending on the kind of car and loan amount, lenders set interest rates. For vehicle loans, interest rates are often fixed.
Who can apply for the Loan?
The petitioner should be a self-employed, freelancer, or a person working for at least two years in a firm or an organization. The eligibility criteria for the applicant for borrowing the loan is the person should be minimum of age 21 years and a maximum of 65 years the person not able to full fill criteria the loan required can be denied. Unemployed applicants can also apply for the loan in the banks of their choice by showing a possible substitute for the source of income which includes return on investment or any fixed deposit or pension.
What do lenders consider when making a car loan decision?
When opposed to residential loans, the loan approval procedure for a vehicle loan is comparatively simpler. However, before accepting your loan application, lenders will consider a few fundamental factors.
- CIBIL Scores and Document: As with all other mortgages, lenders consider both the state of your credit at the time of application and the consistency of your prior payment history. Before making a final decision on your loan application, lenders consider your CIBIL Score and credit background. The likelihood of your loan being approved rises as your CIBIL Score rises.
- Income and Employment Status: To assure loan repayment throughout the course of the loan, lenders also verify that you have a stable job and a consistent source of monthly income.
- Existing Loan Interest payment: Before deciding whether to approve your loan request, lenders also keep track of all of your past EMIs. They typically calculate your monthly income ratio and EMI outflow.
What paperwork is needed to apply for something like an auto loan?
Each lender has different requirements for real documents. However, identification proof, address proof, proof of salary, and bank statements are the fundamental documentation that lenders want.
What additional expenses, fees, or levies must I pay?
You must consider additional expenses in addition to the vehicle’s purchase price, such as taxes, service charges, insurance costs, processing fees, paperwork costs, stamp duty, etc. When applying for a loan, it is usually important to examine all the fees and charges in advance.
Things to watch out for
You don’t necessarily have to choose the bank your car dealer recommends; if another lender has better loan conditions, you may always choose them. Therefore, before choosing a loan, always do in-depth research by researching lenders and their rates.