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.webp "Features and Benefits of Car Loan |")
Car loan is when someone borrows money from a bank or lender to buy a car. To get a car loan, you have to meet certain requirements like having a good credit score and a steady income.
Even if you don’t have enough money to buy a car all at once, there are many people who can lend you the money so you can still buy the car.
Getting a car loan used to be a big hassle, but now it’s super easy. You don’t even need to use paper or go to the bank. All you have to do is click a few buttons on the computer and fill out a form online. Almost every bank has car loans available with good interest rates. Depending on how much money you can afford to pay each month, it’s now really simple to get a car loan and make payments without it causing any problems for your money.
Features and Benefits of Car Loan:
- Get money to buy new and old cars.
- You can borrow money to help pay for most of the cost of a car. Usually, you can borrow up to 85% to 90% of the total cost of the car. But, some banks may lend you the full amount of money you need to buy the car if you meet certain requirements.
- The amount of time you have to pay back the loan can be as short as one year or as long as seven years.
- The amount of time you have to pay back the loan can be as short as one year or as long as seven years.
- Some places that give you money to buy a car can give it to you right away.
- If you buy a car from a certain dealer or company that the bank works with, you might get more discounts and special deals.
- When you borrow money to buy a car, the car will be kept by the bank until you pay back all the money you owe.
- The way most people pay back a car loan is by making the same amount of money each month, called equated monthly instalments (EMI).
Factors Affecting Car Loan:
Credit score
The way most people pay back a car loan is by making the same amount of money each month, called equated monthly instalments (EMI).
Down payment
Every car loan has a set amount of money or percentage of the car’s price that you need to pay yourself, called the margin. Some loans allow you to borrow the full amount, but there are rules you have to follow to qualify for them.
Debt-to-income ratio
When you want to borrow money to buy a new car, the people who lend you the money will look at how much money you make and how much money you have to spend each month. They want to make sure that you can afford to pay back the loan and still have enough money for everything else you need to pay for. If you have a lot of other things you have to pay for each month, like bills or other loans, they might not let you borrow as much money. This means you might have to get a smaller loan or have stricter rules about paying it back.
Age of vehicle
When people want to borrow money to buy a used car, the age of the car is really important in determining how much interest they have to pay. It can even determine if they can get the loan or not.
Eligibility Criteria:
To get a car loan, there are some rules you have to follow. You need to understand these rules to know if you can get a loan to buy a car. Let’s look at the things that decide if you can get a loan to buy a car.
Documents Required:
- Photo ID and Age Proof
- PAN card
- Passport
- Driving license (mandatory)
- Signed application form
- Three passport size photographs
- Residence Proof
- Valid passport
- Voter ID card
- Driving license
- Postpaid utility bill (gas bill and electricity bill)
- Updated passbook or bank account statement
- Notarised registered rent agreement
- Bank statement for the last six months
- Salaried individual
- Last three months’ salary slips
- Form 16 or Income Tax Returns
- Self-employed individual
- Balance sheet and profit and loss account, computation of income for last two years.
- Income Tax Returns – last two years for applicants, 26AS, Traces
- Business proof :
- Gomasta License, Registration Certificate, Service Tax Registration, among others
- IT Assessment/Clearance Certificate
- Income Tax Challans/TDS Certificate (Form 16A)/Form 26 AS for income declared in ITR.
How to Apply?
You can get a car loan in different ways.
- Go to the bank in person.
- Use your computer or phone to apply for something on your bank’s website.
- Borrow the money from the car dealer to buy the car.
The bank you pick will gather your papers and start the application process. They will look at things like your credit score, how much the vehicle is worth, and other things to decide if they will give you a loan or not.
