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    Zero-Down Payment Car Loan

    The auto finance availed to purchase a car of loan. Making a high down payment on your car can help bring down the total cost of your car loan. For instance, if the price of the car is Rs.15 lakh and you make a down payment of Rs.5 lakh, your car loan will be limited to Rs.10 lakh. The interest payments on Rs.10 lakh is lower than Rs.15 lakh. Most banks and non-banking financial companies in the country usually offer car loans up to 85-100% of the ex-showroom price of the car. You will have to cover the down payment, motor insurance cost, and road tax.

    If you don't have sufficient funds to make a down payment on your car, you must ensure your credit score is above 800 with a clean credit report with regards to old and existing loan repayments. It is difficult to get a car loan without down payment. You may have to opt for a loan against securities in such a case. However, this is not a smart financial decision. Instead, you can choose to save up money to make a down payment on the car of your choice.

    Post demonetisation of high-value currency notes (Rs.500 and Rs.1,000) in 2016 in an effort to transition into a digital economy while bringing down the circulation of black money, auto manufacturers and lenders joined hands to boost vehicle sales. Consumers are offered 100% on-road finance and car delivery without down payment in most dealerships in tier 1 and tier 2 cities in an effort to boost vehicle sales post demonetisation.

    Car Loan Eligibility Criteria for 100% On-Road Finance

    Top banks in India like HDFC Bank, ICICI Bank, and Axis Bank are offering 100% on-road finance to borrowers who meet the following eligibility criteria:

    • The applicant must be 25 years or above.
    • He or she must have a CIBIL score of 800 or above with no negative loan repayment history in the credit report.
    • The applicant must have a minimum annual income of Rs.3 lakh. The car loan amount will not be more than the applicant's net annual income. Existing loan EMIs plus the proposed loan EMI must be less than 50% of the applicant's salary.
    • He or she must be a salaried employee or a self-employed person with minimum 3 years of work experience.
    • The applicant's bank balance must be minimum 3 times the proposed loan EMI.
    • No cheque return history in the last 6 months in the applicant's salary account or business current account.
    • The applicant should be residing at the provided address for minimum 2 years.

    To find out if there are reliable zero-down payment auto finance available in India, do some research online. If there are zero-down payment car loan offers, check if you meet the eligibility criteria. Focus on improving your credit score by making regular EMI payments and credit card bill payments on time. Another method of improving your credit score is by balancing secured and unsecured loans.

    Documents Required for 100% On-Road Finance

    Here is a list of documents that an applicant must furnish along with a duly-filled and signed car loan application form:

    • For income proof, the applicant can submit the company ID card, salary credit in bank statement, Form 16 (in the case of a salaried employee) and VAT or ST registration with current account statement (for a self-employed individual).
    • For address proof, he or she can submit homeownership deed.
    • For identity proof and age proof, the applicant can submit PAN card, Passport, Aadhaar card, and recent passport-sized photographs.
    • Previous loan or vehicle ownership documents like RC of old car and loan agreement.

    Income proof for a salaried employee can include last 2 years’ Form 16, last 3 months' payslips, and last 6 months' salary account bank statement. Income proof for a self-employed individual can include the last 2 years' ITR, last 6 months' current account statement, Sales Tax certificate, Service Tax certificate, and VAT certificate.

    Those customers without the funds to make a down payment on a car of their choice can opt for a zero-down payment car loan. It is easy to apply for a car loan online. Visit the bank website to download the car loan application form, fill it up, and submit it along with the necessary document proofs. Use the online car loan EMI calculator to find out how much the loan will cost you on a monthly basis.

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