A Car loan is the appropriate and fitting way to purchase a car whether a new or used one. Various lending financial institutions are providing several offers on a car loan in which car loan eligibility criteria matter. The loans are designed in order to fulfill the needs of a variety of customers.
One cannot simply apply for a car loan. An individual needs to fulfill the Car Loan eligibility criteria set by the lending institution and should have the documents required for a car loan.
Basic Car Loan Eligibility Criteria:
To obtain the loan amount, a person must meet the Eligibility criteria for car loan.
- Age: The age criteria set by banks and NBFCs for a car loan is as per the RBI’s guidelines. For the salaried applicants, the age required is 25 years minimum and the maximum age permitted is 58 years. In the case of self-employed, the minimum age is 28 years and 65 years maximum.
- Employment: The banks check for a set of employment details while approving a car loan. For salaried people, the minimum duration of employment is of 2 years, and a minimum period of 3 years for a self-employed candidate.
- Income: The income requirement to get a car loan differs from bank to bank. Many nationalized banks need the least income of Rs 2.5 lakhs per annum. In the case of private banks, this limit may be reduced depending on other credibility factors. The income also decides the Car Loan Interest Rate.
- Credit Score: It is necessary to have a decent credit history and score. Presently, CIBIL is the main institution that gives credit rating of individuals to most banks in India. Thus having a bad credit score can be the main hurdle in availing a car loan.
One must bear in mind that the lending firm takes into account the basic payment ability of an applicant while approving a car loan.
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