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In today’s life there are many things which have become very common basic needs. Among them cars is also a basic need for everyone. It’s more of a dream for many to have a car. Now you can also make your dream come true as vehicle loans are available at affordable interest rates for even middle-class families. These car loans are also known as auto loans or automobile loans. Borrowing some amount of money from banks to buy a car is known as car loan. Cars can be brought by depositing down payment and rest of the money can be taken as loan from the respected bank which is providing low interest rates based on the model of the car.
There was a time when owning a car was a luxury not all could afford to have. Buying a car was a life milestone for everyone who could shell out those huge amounts of money all at once to buy their dream car. With growing times, changing demographics and emerging car loan lenders, for a majority of the Indian middle class, owning a car today is no longer a luxury, but in fact a necessity made possible by taking a car loan. Finance is provided for purchase of a car or other vehicles either for personal or business use. In the car loans there will be types of taxes, fees and all. All this includes in the total car loan amount provided to the customer. To know more details about the car loans, follow the post. All the basic, important and required details of many different banks are given below here.
Car loans have many benefits. Some of the benefits for applying for car financing loans in India given below:
1. Monthly payments can be directly debited from your bank account.
2. There is a flexibility to choose the tenure as per your convenience.
3. No collateral required to avail the car loan.
4. Maximum loan amount can be 100% of the on road price of the car.
5. It helps you purchase a car even if you don’t have all the money for it right now.
6. Many lenders will offer an interest rate based on your credit score so a high score to get you a cheaper loan.
7. Full funding available for new cars
8. The loan period is generally between 1 and 8 years.
9. You can get a maximum loan amount up to 3 times the annual salary (for salaried professionals) and 6 times the annual income (for self-employed professionals).
10. Car Loan Interest Rate is calculated on the basis of the profile, loan tenure, and the amount of loan sanctioned.
11. Equated Monthly Instalment (EMI) is worked out for repayment.
12. Early settlement of the pending amount of loan is subjected to the prepayment penalty.
There are two sources of taking car finance. If you are planning for a car and avail a loan then as a customer you have three options.
1. You can avail a loan from any of the banks.
2. You can avail a loan from NBFCs which is (Non-Banking Financial Corporation) like Tata Capital, Bajaj Finance etc.
3. You can also get a loan from the car dealer in which, from where you are buying a car, they will provide the loan for a lump sum amount of money to buy a car. For which you have to pay back that amount through monthly EMI format along with the interest to that amount
There are several different types of car loan so that every individual will find at least one car loan that is able to meet their requirements:
1. New Car Loan:
A new car loan is taken out to purchase new vehicles generally from dealerships. Many salaried and self employed individuals are looking to get their dream car that gets higher pay packages. Some individuals have the cash in hand and they prefer to purchase a new car on the spot. There are many banks which provide new car loans with low car loan interest rates.
2. Used Car Loan:
Used car loans are taken by the borrower to purchase a used car from either a second hand car dealer or an individual seller. Sometimes people can’t afford to buy a new car and in such cases, going for a used car is the best option.
There are some eligibility criteria required to apply for the car loan. One who is going to apply for the car loans has to reach these minimum eligibility requirements as follows.
1. The minimum age of the customer should be 18 years and the maximum age should be 75 years.
2. Salary of the customer should be minimum Rs.10, 000 per month.
3. Car types can be new or used one.
4. 3 years total experience in profession/ business.
5. 2 years should be in my current post/profession of business.
6. Salaried/ self-employed individuals / partnerships have to apply for car loans.
While planning to apply for a car loan (new or old) there is a certain criteria that you should check up on before stepping ahead. First things first, the age of the customer should fall between 18 to 75 years and the minimum salary should be Rs. 10,000 per month. The customer's experience in the profession/business he is into has to be about 2-3 years.
Know that the eligibility criteria and documents that are required for acquiring a car loan varies from bank to bank and can be tweaked based on which bank you are seeking loan from. Here is a detailed table which you can give a look at in order to find out more in this light.
| Identity proof (any of the following) |
|
| Address proof (any of the following) |
|
| Proof of income |
|
To apply for a car loan, you have to pay fees and charges applied by the Bank. It covers all charges and fees made by a bank to their customers.The following charges are taken from the Bank is joining fee, annual fee, interest rate, late payments charges etc.
|
TYPE |
CHARGES |
|
Interest rate |
7.35% p.a. |
|
Processing fee |
Starts from 0.230% of the loan amount |
|
Documentation charges |
Rs.550 plus GST |
|
Loan Amount |
100% of on road price of the car |
|
Prepayment charges |
5% on principal outstanding or interest outstanding for unexpired period of loan (whichever is lower) |
|
Charges for late payment of loans |
2% per month on the outstanding instalments |
|
Tenure period |
1 year to 8 years |
|
Swap charges |
Rs.500 per transaction |
|
Cheque bounce charges |
Rs.500 per transaction |
|
Statement of account charges |
Rs.200 per statement |
|
Prepayment statement charges |
Rs.200 per statement |
|
Duplicate NOC/ No due certificate charges |
Rs.500 per NOC/NDC |
|
Loan cancellation charges |
Rs.3000 per loan |
1. Compare the loans offered by all banks and NBFCs and choose the one that suits your requirements the best
2. Compare the rates of interest and see if you have a fixed and floating rate of interest option
3. Be smart about the car you wish to buy. If you're starting your career, you may want to buy a smaller vehicle as buying a bigger vehicle may result in it being difficult for you to repay the loan
4. Read the terms and conditions, and the hidden fees and charges
5. Decide on the insurance
6. Never apply to multiple banks, as it will negatively impact your credit score
|
Maruti Ignis |
Toyota Fortuner |
Honda city |
Mahindra XUV 500 |
TATA Nixon |
Maruti Brezza |
Maruti Wagon R |
Maruti Eeco |
Toyota Innova Crysta |
|
Maruti S Cross |
Mahindra Scorpio |
TATA Tiago |
Hyundai Creta |
Maruti Swift |
Maruti Omni
|
TATA Hexa |
Maruti Celerio |
Mahindra Bolero
|
|
Hyundai I20 |
Maruti Dzire |
Mahindra TUV300 |
Hyundai Eon |
TATA Tigor |
Hyundai Grand I10 |
Maruti Baleno |
If you are interested in buying a car through loan and want to know the details of the best available interest rates from different banks, you can check here. Having an own car is not only a dream for many families but it is also a need which serves for transportation. More than a luxury need it became a basic need for the people who travel for long distances. Knowing the correct information before taking a car loan is the knowledgeable thing. Here are the details about the interest rates of the particular banks for the car loans.
Important note-
Interest rates and the EMI (Equated Monthly Instalments) per lakh depend on the various factors like initial down payment, customer profile and the amount taken towards the loan.
|
BANKS |
INTEREST RATE |
|
9.05% to 11.30% |
|
|
14.80% to 16.80% |
|
|
13.99% |
|
|
15.00% |
|
|
8.00% to 10.75% |
|
|
8.70% to 9.20% |
|
|
9.75% |
|
|
8.70% to 9.5% |
|
|
8.80% to 10.50% |
|
|
12.75% to 15.30% |
|
|
13.75% to 16% |
|
|
8.00% to 24% |
|
|
9.25% |
|
|
9.30% to 12.85% |
|
|
9.30% to 9.90% |
|
|
12% to 14% |
|
|
10.65% to 15.50% |
|
|
8.85% |
|
|
8.95% |
|
|
7.75% to 10.30% |
|
|
8.45% |
|
|
8.9% to 9.35% |
These are the following ways to getting your loan approved faster i.e :
1. Check Your Credit Report
Several organisations give you the option to check your credit report without any charge once a year.
2. Pay your bills on time
One thing you need to ensure that your loan is approved is a good credit score. You can achieve this by paying your credit card bills on time or your monthly EMIs on the stipulated date.
3. Don’t borrow too much
By paying a larger amount upfront as down payment, you can reduce the loan amount, which means that it will be easy to pay it off quickly. Remember, a small loan amount means smaller EMIs or a shorter payment schedule.
4. Choose a loan plan that fits your budget
Ensure that you choose a loan scheme that enables you to easily pay off the EMI of the car loan at the earliest.
5. Read the terms and conditions carefully
Each loan has a specific set of terms and conditions. It is important to read these conditions carefully, as it will help you choose one loan over the other
6. Get car insurance
While offering a loan, the main concern of banks and NBFCs is not to incur any losses.
EMI (equated monthly installment) is the amount that is to be paid on a monthly basis against the loan availed from the financier. The EMI is the sum of two components, namely principle and the interest. One can ascertain the amount of EMI on the car loan by using the EMI calculator on the website. The EMI calculator captures basic personal details, income details, loan value and tenure and generates the approximate EMI payable for the car loan availed. The EMI so generated may differ from the actual payout that may happen subsequently. This would however, be indicative of the amount to be set aside on a monthly basis from the household budget. This gives a clear view of the affordability given the current net earnings and household budget of the individuals.
The mathematical formula for calculating EMIs is:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where,
P stands for the loan amount or principal,
R is the interest rate per month
N is the number of monthly instalments.
The processing fee charged by car loan starts from 0.230% of the loan amount.
The minimum tenure period is 1 year and maximum tenure is 8 years to apply for a car loan.
No, there is no need to provide additional security or guarantor. The loan will be provided against hypothecation of the car.
Yes, the loan amount charged to apply for a car loan is 100% of the on road price of the car.
There are two types of car loan i.e. :
New car loan
Used car loan
Yes, documentation charges are applied by car loan and it should be charged Rs.500 plus GST.
Almost, all small, medium and large cars can be bought with a car loan. However, do check the fine print of the bank’s brochure to check if there are any exceptions.
The minimum age of the applicant is 18 years and maximum age is 75 years to get a car loan.
Yes, it can be foreclosed on the payment of foreclosure fee of up to 3% on the outstanding principal amount along with Service Tax.
The mathematical formula for calculating EMIs is:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where,
P stands for the loan amount or principal,
R is the interest rate per month
N is the number of monthly instalments.
To banks, your credit profile is the most important factor they will consider before funding you. Your credit profile tells banks if one is able to and intend to pay back the loan.
Last Updated on : 28/Jan/2021Know More About
You're eligible for a Car Loans if you:
Are legally adult enough to handle it
Have still got it
Get a regular pay check
Make more than a basic buck
Your eligibility depends on:
Earn more than minimum income required
Maximum allowed Car Loans is Rs. 10K to Rs. 45 lakhs
EMIs of other loans loweryour eligibility
Boost your eligibility by:
Pay off your credit card bills
Choose longer tenure loan up to 5 years
Nothing gets done without that paperwork (which we'll happily carry over to the bank for you, no sweat). Here's what you'll need:
- 1. Photo ID and age proof
- 2. Signed application form with photograph
- 3. Residence proof
- 4. Last 6 months bank statement
- 5. Documentation for salaried applicants:
- Last 3 months salary - slips
- Form 16 or Income Tax Returns
- 6. Documentation for self-employed applicants:
- Last 3 years Income Tax Returns with computation of Income
- Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account
Updated on 25 Nov 2017
| Car Loans Details | |
|---|---|
| Interest Rate (Monthly reducing balance) | 9.05% - 11.3% |
| Processing Fees | Varies with bank |
| Loan Tenure | 1 year to 8 years |
| Pre-closure Charges | Varies with bank |
| Guarantor Requirement | Varies with bank |
Car Loans EMI Calculator