Be it a short-distance or long-distance travel, having a car of your own can be very convenient. From commuting to the office on weekdays to going on long road trips on weekends, with a car loan you can purchase a car of your choice to meet your traveling needs. Imagine not having to put up with the hassle of accessing public transportation, expensive private cab hires or the cost of damages to a rental car. Auto finance is available for the purchase of most makes and models of passenger and commercial vehicles in the Indian market.
Whether you wish to buy a new car or a used car, given the rise in prices of passenger cars across top carmakers this year, it is not surprising that consumers are leaning towards auto financing to realise their automotive dreams. To purchase a car of your choice, you can apply for a low-interest rate new car loan or used car loan from a reputable lender. To be eligible for a car loan from a bank or a non-banking financial company (NBFC), there are 3 major factors that one should consider - minimum annual income requirement, a stable occupation, and a credit score of 750 or above.
To apply for a car loan, the applicant must meet the following eligibility requirements:
The maximum loan amount that a self-employed or salaried applicant can apply for depends on his or her annual/monthly income.
Before applying for a car loan, it is advisable to check your car loan eligibility so as to avoid loan rejection. Multiple loan rejections will definitely have a negative effect on your credit score. At the time of processing a car loan application, lenders check the credit score and credit report of the applicant. Too many loan rejections, outstanding dues, and bankruptcies in one’s credit report serves as red flags to the lenders. Banks and NBFCs will hesitate to lend car loan to applicants with a bad credit report. Also, applying for multiple loans at the same time indicates financial desperation on the part of the applicant. That is why, it is better to check whether you meet the car loan eligibility criteria of your chosen lender before applying for a car loan.
Car loan eleigibility criteria differs from lender to lender. After picking a reputable lender, visit the official website of the bank or NBFC to check your car loan eligibility online. For each type of car loan - new car loan, used car loan, and loan against car, the eligibility criteria varies. The online car loan eligibility calculator is easy and simple to use. All you have to do is enter the make and model of car, your age, income, and occupation. Click on the 'calculate' button and get an instant result.
What happens if after checking your car loan eligibility online, you find out that you aren’t eligible for a car loan? Make a note of the type of requirement (age, credit score or income requirement) that you are lacking in and work at improving your car loan eligibility. Here are a few valuable tips on increasing your car loan eligibility:
Apply for a car loan amount that you can afford to repay. An applicant’s car loan eligibility helps the lender determine the maximum loan amount, interest rate, and tenure. Visit a reliable third-party comparison website to compare various car loan offers and choose one that offers a low interest rate, zero processing fee, a suitable loan tenure, and flexible repayment options.