A Car loan is the appropriate and fitting way to buy a car whether a new or used one. Various lending financial institutions are offering several offers on a car loan. The loans are designed in order to fulfil the needs of a variety of customers.
One cannot simply apply for a car loan. An individual needs to fulfil the Car Loan eligibility criteria set by the lending institution and should have the required documents.
Basic Car Loan Eligibility Criteria:
- Age: The age criteria set by banks and NBFCs for a car loan is according to the RBI’s guidelines. For salaried people, the minimum age required is 25 years and the maximum age permitted is 58 years. In the case of self-employed, the minimum age is 28 years and the maximum limit is 65 years.
- Employment: The banks look for a set of employment details while approving a car loan. For salaried people, the minimum period of employment is of 2 years, and a minimum period of 3 years for a self-employed applicant
- Income: The income requirement to avail a car loan differs from bank to bank. Many nationalized banks require a minimum income of Rs 2.5 lakhs per annum. In the case of private banks, this limit may be lowered depending on other credibility factors. The income also determines the Car Loan Interest Rate.
- Credit Score: It is essential to have a decent credit history and score. Presently, CIBIL is the primary institution that gives credit rating of individuals to most banks in India. Thus having a bad credit score can be the main obstacle in availing an auto loan.
One must bear in mind that the lending firm takes into account the basic payment ability of an individual while approving a car loan.
Leading Providers of Car Loans in India: