The car Loan application process is much simpler as compared to other types of loans. The reason is the amount involved is low, and the documents required are simple to obtain. With the increased competition among banks and firms, it takes less than a week to disburse the loan.
However, after you have selected the car and the lending institution, one needs to understand the car loan application process involved in availing a car loan.
Discussion with Lender
Once the lender has been selected, the applicant must have a thorough discussion with the concerned officials of the bank, in order to get the best deal. There should be total transparency in terms of conditions of the deal so as to avoid any future inconvenience. Car Loan Interest Rate is an important aspect that needs to be verified so that the borrower does not end up paying an amount excessively higher than the actual price of the car. Decide the dates on which you can submit the complete documents along with the application of the loan.
Documentation required during the car loan application process
It is essential for an applicant to provide all the correct documents so as to avail the offer most suited for them. The important documents required to avail an auto loan are income proof, address proof, identity proof, and proof of signature. Usually, the documents required are the same in the case of all banks, but these may change in the case of salaried and self-employed people.
Processing By Bank
Firstly, you need to pay an amount which is the processing fee used in the further processing of your car loan application form. When you have submitted all the documents to the bank, then the processing of the loan begins. An agent from the bank visits the customer’s residence and the place of employment for verification.
In case of any discrepancy, the agent will first try to find out errors with the help of the applicant or may revert to the bank manager with details. Once the validity of the information has been confirmed, the approval in the bank is relatively simple which can be completed in a day.
Approval and Disbursement
The approval by the lender is based on the validity of the information given by the applicant. Once the approval is over, the client is informed either by phone or through the mail of the same and is given a date for collection of the cheque in favor of the dealer, from whom the car is being proposed to be bought. The disbursement is usually made in a single payment with the full amount required.
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