Car loan

Car loan

Looking to buy your dream car? Whether it’s a sleek sedan, a powerful SUV, or your first hatchback, our Car Loan makes it easy and affordable. With competitive interest rates, flexible EMIs, and fast approvals, we help you hit the road without the financial stress.

 

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Features of a Car Loan

  •  Car Loans for applicable for both Brand New Car and Used Cards
  •  Interest rates can be fixed or variable
  •  Can be availed for both purchase of car for personal as well as business purpose
  •  Flexible repayment time period
  •  Car Loan interest rates are usually lower
  •  Easier process to avail a Car Loan
  •  It is a secured loan and hence eligibility probability is much higher 
  • The vehicle itself is a collateral against the loan, and needs is hypothecated with the bank until repayment of the final instalment.
Benefits of Car Loan
  •   Most Car Loans finance the on-road price of the car. Some banks even fund 100% of the on-road price, which means you do not need to even personally fund for the down payment.
  •  The car serves as the collateral for the loan making it a secured loan.
  •  At times slightly unfavorable credit score can also get you a car loan, considering the simple process involved in the Car Loan process. However, this varies from bank to bank.
  •  Car Loans interest rates are fixed. Interest rates are based on credit score and so a high score can get you a cheaper interest rate.
 
1)Car Loan Pre-Closure

If you choose to pay off the outstanding loan amount before the loan term ends, you can do that too. All banks offer you the foreclosure or prepayment facility. Some of the banks takes a penalty fee for that and some may allow you to do so without charging any penalty fee. Prepayment of loan will release your car from hypothecation and gets you the full ownership.

2)Top-Up of your Car Loan

If after availing a car loan, you need additional funds for any purpose, you can avail a top-up loan on your existing car loan. Up to 150% of the car’s value can be availed as a top-up loan. For you to avail a top-up on your car loans will need to have maintained a clear payment record for at least 9 months. The process to avail a top-up loan on your existing car loan is quick and requires minimal paperwork.

3)Car Refinancing

Car Refinancing is when you take a new loan to pay off the outstanding balance on your existing car loan. Car Refinancing is generally used by customers for features such as low interest rates, to increase tenures, or to change the terms of the existing loan. In any of the cases, customers generally go for Car Refinancing to save money.

It is a good to go for Car Refinancing when you see that there is a drop in interest rates when compared to your existing interest rate. One needs to know that refinancing car loan is not a right choice when you have already made a substantial repayment, or if the car value has depreciated, or the foreclosurecharges are high, and when you have plans to apply for new loans in the future as refinancing may impact your credit score negatively.

 

Documents Required for Home Loan

General Documents

  • PAN Card & Aadhar Card

  •  Income proof (Salary slips / ITRs)

  •  Bank statements (past 6 months)

  •  Property documents (Sale deed, Agreement to Sale, etc.)

  •  Passport-sized photos

  •  Employment/business proof

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FAQ :-

What is a car loan?

A car loan is a loan provided by a bank or NBFC to purchase a car basis various factors such as your repayment capacity, credit score, age etc.

Can a car loan be availed to purchase a used car?

Yes, car loan can be availed for pre-used cars as well. However, the interest rate for a loan for used to car differs from that of a purchase of a new car. The loan would only cover the price of the car, other costs such as transfer of registration, etc. will have to borne by you.

Should there be collateral given for a car loan?

A car loan is a secured loan where the car bought itself acts as collateral. There is no additional collateral that needs to be given requirement for a car loan. However, you do have to get the RC (registration certificate) of the car endorsed with the bank. This endorsement is cancelled after repayment of the loan is completed.

What is the maximum loan amount one is eligible for?

The maximum loan amount that one can avail will vary from one bank to the other. Usually, it is between 80%–90% of the car’s on-road price. There are a few banks that even provide 100% of the car’s ex-showroom price. The percentage of funding also depends on the price, type of car (standard/ premium) and whether it is a new or pre-owned car.

What are the documents needed to be submitted when applying for a car loan?

The documents needed for a car loan are income proofs (last three pay slips/last acknowledged ITR), address and identity proofs along with PAN card. Other documentation requirements, if any, tend to differ from one lender to another.

What is the typical tenure of a car loan?

It usually ranges from 1 year to 5 years. If your loan tenure is shorter, then the EMI you pay is higher is. There are a few banks providing car loans for longer durations of up to 7 years.

Is there a minimum salary requirement to apply for a car loan?

There is no specification of minimum salary requirement from most banks, however, chances of loan application getting rejected in case your salary does not exceed a predetermined threshold level as required by the internal requirement of the bank is higher. In cases of salary requirement not matching you could apply the loan with a co-applicant.

Are there chances that the car loan application can be rejected?

In cases of a bad credit score, past cases of defaulting on repayments, earlier loan applications rejected multiple times, etc. In addition, bank’s eligibility criteria such as minimum income level, age, previous relationship with the bank, etc. needs to be met to get your loan approved.

Are there any tax benefits of a car loan?

No. Unlike a home loan, a car loan has no tax savings benefits what so ever.

Fixed rate vs floating rate, which is applicable for car loan?

In fixed interest rate on car loan, the interest remains the same for a period of time. In such a case, car loans have a specific EMI payout requirement that does not change due to market conditions. In floating rate car loan, the applicable interest rate of the car loan varies periodically as per the decision of the bank. Thus the payable EMI on a floating rate loan may change from time to time.