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A bigger pay-cheque can mean a bigger car. Your income is the key factor in determining your car loan amount.
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.
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.
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.
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
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.
Your relationship with the bank can go a long way in increasing your loan amount eligibility at a reduced interest rate.
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.
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.
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.
Table Showing Interest Rates, EMI and Others of Different Car Loan 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 (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 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 |
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 |
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.