What is a Car Loan?
For many middle-class families, purchasing a four-wheeler vehicle is a dream come true. It can be fulfilled due to a lack of financial capabilities and a constant stream of revenue. In these uncertain times, a car loan might be used to fund your purchase. The Car Loan has a simple interest rate. Taxpayers will fund the vehicle's loan to the bank, and you won't have complete ownership until the final installment is paid. An automobile loan does not, by itself, produce equity. If you wish to use a car loan to develop equity, you should be aware that the loan will not assist you in improving your credit score or Record. Car Loan Interest Rates help you to know the monthly interest charged on the loan which the customer has to pay at the end.
Eligibility Criteria of a Car Loan -
The chosen age range should be between 18 and 75 years old at the most.
A minimum monthly income of Rs 20,000 or more is required.
A letter of employment or a certificate of experience from the current employer for the previous year.
The occupation is irrelevant here, but confirmation of a consistent stream of income is required.
When Income Proof, Identity Proof, and Residence Proof are required, document verification is asked.
Credit history is taken into account.
The vehicle information, as well as the firm information where your transaction will be made, are required.
The applicant's vehicle insurance and driver's license are required.
Features of availing a car loan -
Loan amount:
In most banks and financial institutions, an applicant can get up to 90% of the car's value, and some lenders even provide 100% of the car's price. Though it allows someone to buy a car with no money down, experts strongly advise that an applicant pay at least 20% of the car's value as a down payment and take out the smallest loan possible because the car's value depreciates.
Loan tenure:
Car loans can be availed for a minimum of 12 months to a maximum of 72 months from a bank or NBFC.
Interest rate:
The car loan interest rate ranges between 7.5% to 16% depending on the loan amount and tenure in addition to the type of loan the applicant avails, i.e. new car loan, a used car loan, or loans against cars.
Preclosure charges and processing fee:
Pre-closing a loan refers to the procedure of closing a loan before the conclusion of the term. Pre-closure or prepayment penalties are among the bank's costs. Depending on the bank and NBFC, the fees can reach 6% of the loan amount. It is charged at no cost by a few banks and NBFCs. The processing fee is the sum paid for the loan to be processed and approved. Existing HDFC Bank clients can find solutions to their questions regarding their records, cards, EMI delay, loan, applications by reaching HDFC Car Loan Customer Care at beneath numbers in their city.
The documents are mandatory to obtain a car loan -
ID proof:
ID proof is a government-issued document that verifies the applicant's official identification. Any valid identification card, such as an Aadhar card, a voter card, a PAN card, a driver's license, a passport, or another government-issued identification card (anyone).
Address proof:
Address evidence is a government-issued official document that verifies the applicant's current address. Banks and NBFCs accept Aadhar cards, voter IDs, PAN cards, passports, and driver's licenses (anyone)
Income proof:
An official document verifying the monthly income or profit of the applicant. It could be an ITR, form 16, salary slips, or profit proof in the case of self-employed individuals or self-employed non-individuals.
Car-related documents:
Details of the dealer, RC book of the car, car's quotation, and other car-related documents.
Bank statement:
The bank statement of the applicant for the last 3 to 6 months.
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