Purchasing a four-wheeler has moved on from luxury quotient to a necessity for many. Hence, there are different car loans available in India offered by banks, non-banking financial companies (NBFCs), and other financial institutes. In such scenarios, it has become essential to choose a loan that fits your budget and provides you with the best benefits.
Always follow these thumb rules when availing auto loans:
1) Set a realistic budget: Before you hunt for your desired vehicle, have a budget in place. It should be in sync with your requirement as well as the income level. Once you have settled with the budget, do in-depth research on all the available four-wheelers under the set range and select accordingly, instead of increasing your budget. It will not hurt if you check the track record of the vehicle and response it receives from the market. This makes sure you are buying a car that you can use for a long time.
2) Check eligibility: Your car finance gets judged based on several factors such as income, age, and income level. Ensure you fulfil these criteria by using the eligibility calculator. The criteria changes from lender to lender. Sometimes, lenders emphasise on employment as well. If you receive stable income and work in a reputed organisation as well as sector, you are considered creditworthy. As for the credit score, the range must be anywhere between 300 to 900. Request for your credit score from the CIBIL agency. Check for any discrepancies and get them rectified if found any. If a lender finds any faults, the loan application gets rejected.
3) Compare options: There is no way you get to know about the best deals in the market unless you do a depth study. Use online aggregator websites where you get to know the various offers from different lenders. You can use the EMI calculator here to gauge which plan fits the bill. The best part about the EMI calculator is you can use them as many times that too free of cost. Taking time to compare different options helps you reap maximum benefits and makes sure you make an informed decision.
4) Documents: Car loan documents require a range of papers for verification as well as for completion of the documentation process. Some of the relevant and critical documents needed when applying for four-wheeler loans are:
• ID proofs such as PAN card, driving license, voter’s ID, passport
• Address proofs like an insurance policy, utility bills, ration card, passport
• Income proofs include form 16, last three months salary slips, pas two years bank statement
If you are self-employed, the KYC documents remain the same. However, you need to furnish additional materials. They include:
• Business ownership
• Stability proof
• Certified CA’s profit & loss statement, income computation, and previous two years balance sheet
• Past six months bank statement
• Income Tax Returns of the last two years
• Turnover proof in the form of sales receipt
These are some of the essential car finance documents. If you fail to submit any of these papers, it could lead to a delay in the approval of the loan. Some lenders even reject the application if you fail to produce even one of these documents.
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