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  • Car Loan Documents Checklist

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  • When you apply for a car loan, you will have to submit a set of documents so that the bank can verify the information and approve your loan request. The documents basically include proof of identity, proof of address, proof of age, proof of income, bank statement, and proforma invoice among others.

    With a wide range of car loan products available in the market, it is no longer a distant dream for a middle-class family in India to own a car. Most major financial service offer car loans. Of late, the process involved in getting a car loan has become simple through the online application process. With proper documents and paperwork, some financial institutions even offer 100% financing to buy a car.

    The car loan documents required are pretty much the same for most financial service providers. The documentation process is usually simpler for salaried professionals. For self-employed individuals, some additional documents such as income tax reports are required to be submitted.

    Read further to know the list of documents to be submitted at the time of car loan application.

    Car Loan Documents for Salaried Professionals

    Document Requirement

    Identity Proof

    • Aadhaar card
    • PAN card
    • Driving License
    • Passport
    • Voter ID

    Address Proof

    • Aadhaar card
    • Passport
    • Driving License
    • Voter ID
    • Family card (ration card)
    • Utility bill (Electricity, water, or telephone)
    • Life insurance policy

    The applicant’s name must be present in the ration card or utility bill.

    Age Proof

    • Birth certificate
    • School transfer certificate
    • Std. 10 mark sheet
    • Aadhaar card

    Income Proof

    • Salary slips
    • Form 16
    • Income tax return document

    Bank Statement

    • 3 to 6 months bank statement

    Signature Verification Proof

    Banks have separate forms for applicants to fill up along with their signature

    Proforma Invoice

    This document contains the price quoted by a dealer for the car chosen by the applicant. The loan amount will be based on the price of the car.

    Car Loan Documents for Self-Employed Individuals

    Document Requirement

    Identity Proof

    • Aadhar card
    • PAN card
    • Passport
    • Voter ID
    • Driving license

    Address Proof

    • Aadhar card
    • Passport
    • Voter ID
    • Driving license
    • Ration card
    • Utility bill (telephone, electricity, or water)
    • Life insurance policy

    Age Proof

    • Birth certificate
    • School transfer certificate
    • Marksheet
    • Aadhaar card

    Bank Statement

    • 3-6 months bank statement

    Business Ownership Proof

    To prove that the business is under operation, the following can be provided:

    • Office address proof
    • Maintenance bill
    • Utility bill

    Additionally, the applicant must also provide a copy of the business registration license.

    Proof of Income

    • Income tax returns for up to 2 years
    • Audited balance sheet
    • Profit-loss statement

    Signature Verification Proof

    Most banks have separate forms to prove the signature of the individual.

    Proforma Invoice

    A proforma invoice containing the price of the vehicle must also be filed along with the other documents to indicate the desired loan amount. Most banks offer up to 95% of the price of the car as loan.

    Why Car Loan Documents are Required

    Financial institutions seek various documents from loan applicants mainly to verify their credibility and financial stability. Thousands of people apply for car loans every day. The financial stability of applicants vary. Most lenders including banks and financial institutions prefer to offer loans only to creditworthy individuals. They typically validate this information by verifying the documents submitted by the loan applicant.

    If your credit history is good, you can enjoy quick disbursement of car loans without any hassles. On the other hand, people with bad credit scores may face certain restrictions from the lender. The lender may sometimes require additional documents like mortgage details, credit card statements, etc. before approving the loan. The lender may also charge higher car loan interest rates for people with bad credit history.

    In certain extreme cases, poor credit history may lead to the outright rejection of a loan application. Considering all this, paperwork and documentation is one of the major steps that you cannot skip during the car loan application process.

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