A car loan is a loan that works, unlike any other loans. Car Loan is available through a bank or any other financial institutions. The lender agrees to provide the amount of loan to the person in exchange for equal monthly payments, which are to be made by such a person to the lender, along with interest embedded therein.
Various features of a Car Loan that makes it better are-
Car Loan is available at an interest rate of as low as 8.50% per annum.
A car loan is a secured form of loan, and it is secured against the car itself. So if a person makes any default in repayment of Car Loan EMI's, banks and financial institutions can resell the vehicle and recover their amount.
To avail of a car loan, various eligibility criteria are needed to be met and the submission of many documents.
The Loan Tenure for a Car Loan is generally of 1 to 7 years.
One of the most significant advantages of a car loan is that it helps boost the credit history of an individual. This we will discuss later on.
Some car loans are also provided on the 100% on-road price of the car. This eliminates the need for any down payment, which creates a massive relaxation from the customer point of view.
Car loans are available quickly, but the following Car Loan Eligibility criteria are needed to be fulfilled for availing a car loan-
The person's age availing for such a car loan has to be 18 years above and less than 65 years.
The person must have minimum monthly earnings of 20,000 or above to avail of a car loan.
The person must have completed one year of employment with the same employer. This is done to ensure stability in the customer's job.
The person applying for a car loan has to be a salaried working individual or self-employed for at least three years. This means they must have experience of at least three years in their respective domain.
Along with fulfilling the above eligibility criteria, the person will have to submit various documents such as-
Identity proof-
Driving License.
PAN Card or Aadhar Card.
Voter ID.
Valid Passport.
Residence Proof-
Electricity Bill or Water Bill or Telephone Bill copy.
Copy of valid passport or Aadhar Card or Driving License.
Income Proofs-
Salary slips for the last three months.
Form 16 or Income Tax Returns copy over the previous two years.
Bank account statements for the previous six months.
Submit Balance sheet, P&L Account, if self-employed.
Various other things that are required to be kept in mind while availing a car loan are-
There are many lenders available in the market. A person must choose carefully from all the available lenders to get the best deal. For example, Axis Bank Car Loan is provided at a very affordable rate of interests.
Submit all the required documents carefully. Otherwise, your car loan application might get rejected by a bank or a financial institution. This may hamper your Credit score.
A PAN card is always preferred to be submitted in documents as with the help of the PAN card, and banks assess whether the borrower is a risky borrower or not. In case a person is proved as a non-risky borrower, it becomes easy for that person to get a car loan approval.
Pay monthly instalments on time. This will reduce your debt and liability, but it will also help improve the credit score, and an improved credit score can do wonders in the market. The improved credit score will make the person more creditworthy in the future. It becomes easy for that person to get loans from any banks or financial institutions.
Conclusion
Car Loans are readily available nowadays. Many lenders offer the same service, and it often confuses the customer. The customer has to make sure to check out and select the best deals suitable for them.
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