Hyderabad Car Loan

Car loans in Hyderabad

Owning a car is generally seen as a luxury, but in today’s day and age it is more of an investment. When a customer makes an investment on a four wheeler he needs to consider certain aspects attached to it. How much return does he get in the long run? Is the investment on a car financially viable to him? To evaluate these aspects, a prospective car buyer needs to first understand how and what type of financing he would be availing for his new car. Getting customized car packages from car dealers can always entice a buyer but he needs to weigh the pros and cons attached. Car dealers tend to charge higher interest rates and also have numerous hidden charges in their packages which will only stretch a customer’s wallet. A safer option for a customer would be to avail a comprehensive car loan package from a bank and avoid all additional expenses. Car loans in Hyderabad can be easily availed by customers as there are numerous banks offering attractive auto financing deals with a variety of benefits.

Top banks providing car loans in Hyderabad

Here are the top ten banks providing car loans in Hyderabad listed in the ascending order of interest rates charged.

State Bank of Hyderabad car loan - State Bank of Hyderabad offers car loan deals with the lowest interest rates of 10.30% per annum in Hyderabad.

State Bank of India car loan - State Bank of India offers car loans with individual rates for men (10.40% per annum) and for women (10.40% per annum).

Bank of Baroda car loan - Bank of Baroda also provides car loans in Hyderabad at a competitive interest rate of 10.50% per annum. Bank of Baroda car loans include the unique feature of installation of CNG-LPG gas kits in four wheelers.

Punjab National Bank car loan - Car finance is available in Hyderabad from Punjab National Bank, with the bank charging two types of interest rates - a fixed rate of 10.65% per annum and a floating interest rate of 10.50% per annum.

Bank of India car loan - Star Vehicle loan scheme from Bank of India is a comprehensive car loan deal with an interest rate of 10.65% per annum.

Andhra Bank car loan - Andhra Bank has exciting car loan schemes for Hyderabad customers with interest rates ranging from 10.75% per annum to 11.00% per annum.

Axis Bank car loan - Axis Bank auto loans are unique and tailor made for Hyderabad customers with an interest rate of 11.50% per annum.

ICICI Bank car loan - ICICI bank car loans in Hyderabad can be availed with interest rates ranging between 10.75% per annum to 15.00% per annum, depending on the type of vehicle and the loan tenure.

Kotak Mahindra car loan - Kotak Mahindra Bank provides car loans with flexible repayment tenures and finances up to 90% of the ex-showroom price of the new car in Hyderabad. The interest rates for Kotak Mahindra car loans vary from 11.50% per annum to 13.50% per annum.

HDFC Bank car loan - HDFC Bank offers car loans in Hyderabad with the lowest down payments and interest rates ranging between 11.50% per annum to 13.75 % per annum.

Age criteria for availing a car loan in Hyderabad

Salaried professionals should be 25 years and above while applying for a car loan with any bank in Hyderabad. The maximum age should not be more than 58 years for an individual at the time of maturity of the car loan.

Any self-employed professional, proprietor, partner or a director from any firm or public and private limited company should be between 28 to 65 years while applying for car loans in Hyderabad. At the time of maturity of the car loan, the applicants should not be aged above 65 years.

Income criteria for car loans in Hyderabad

Applicants with regular salaries should have a gross annual income of at least Rs 4 lakhs to be eligible to apply for a car loan in Hyderabad. Individuals should have been in continuous employment for at least two years and should be employed with their current employer for at least one year.

Businessmen are required to show a gross annual income of Rs 2.5 lakhs with business stability of more than three years to qualify for a car loan in Hyderabad. Partnership firms and private / public limited companies should also show profits of Rs 2.5 lakhs after taxation to get an approval for a car loan. Firms and companies are also required to be in business for at least a period of three years.

Documents required for a car loan in Hyderabad

Applicants have to submit the below mentioned documents specific to each category while applying for a car loan in Hyderabad.

As Identity proofs, copies of these documents can be submitted for a car loan approval - Valid Passport of the applicant, PAN Card, voter’s ID card and valid driving license.

As address proofs, copies of any of the following documents can be provided to the bank - Ration card, driving license, voter’s ID card, valid passport of the applicant, telephone bills, electricity bills, life insurance policies and PAN card.

Proof of Income

Salaried individuals need to furnish their latest salary slips, income tax returns and form 16 for the last two years as income proofs for car loan applications.

Self-employed professionals have to submit income tax returns for the last two years along with financial statements. Partnership firms and corporate companies need to submit their income tax returns for the last two years, balance sheets, profit and loss account statements and audited reports also for the last two years.

In addition to the above documents, applicants should also provide their bank account statements for the last six months and signature proofs as requested by the bank for car loan applications in Hyderabad.

Hyderabad Car Loan FAQs

Here are some frequently asked questions about Hyderabad car loans:

1. How to apply for a car loan?

Potential borrowers/applicants can visit the bank website, a reliable third-party website, or the nearest bank branch to apply for a car loan. Download the car loan application form from the bank website. Submit the duly-filled and signed application form along with the necessary document proofs to the bank. The bank will verify the details furnished by you, process the loan application, and approve or reject it depending on whether you meet the eligibility criteria.

1. What are the documents required for a car loan?

• Applicants are required to submit the following documents as identity, age, income, and address proofs to the lender at the time of applying for a car loan:
• Identity proof - PAN card, Aadhaar card, Passport, Driving License, and Voter ID.
• Age proof - Birth certificate and 10th/12th school certificate.
• Income proof - Last 3-6 months’ salary slips in the case of a salaried person and profit and loss statement in the case of a self-employed person. Last 3 months’ bank statements and Form 16.
• Address proof - Ration card and utility bills like telephone or electricity bills.

1. How to locate a bank branch?

Most banks have a ‘Branch Locator’ tool on their websites. All you have to do is enter your city and state into the tool and click on the ‘Search’ button. You will get a list of the nearest bank branches in your locality with contact details such as address and phone numbers.

1. How to avoid car loan rejection?

Before applying for a car loan, check your car loan eligibility to avoid loan rejection. Multiple car loan rejections can have a negative effect on your credit score which in turn, can affect your future loan prospects. Ensure you have a good credit score and meet the minimum monthly/annual income requirements set by the lender in order to be eligible for a car loan.

1. How to reduce the cost of your car loan?

The monthly and overall cost of your car loan can be determined using a car loan EMI calculator. Making a high down payment on a car of your choice can reduce the principal amount of your car loan. Thus, reduce the overall cost of your car loan. A suitable loan tenure can help you save on car loan interest. Opt for a short loan tenure so that you can repay your car loan quickly and save up on the overall interest payments.

1. How to save on car loan interest?

• Make a higher down payment on the car of your choice so that you can reduce the overall cost of your car loan.
• Convert car loans obtained before April 2016 to MCLR rates so that you can benefit from a change (reduction) in interest rates during the loan tenure.
• Opt for prepayment or foreclosure in order to get rid of your car loan faster. However, before making a prepayment or pre-closing your car loan take into account the various charges levied by the lender as penalty for pre-closing a loan. Ensure the charges don’t reduce your car loan interest savings.
• Make an extra EMI payment if you have sufficient funds or increase the percentage of your EMI if you have obtained a hike in your yearly income. An additional car loan EMI payment or increase the percentage of EMI can help increase your car loan interest savings.

1. What is the difference between a fixed interest rate and floating interest rate?

A fixed interest rate remains the same throughout the loan tenure whereas a floating interest rate changes during the loan tenure. Depending on the interest rate, the loan EMI changes as well. Loans obtained after April 2016 go by MCLR rate as per the rules of the central bank. MCLR is the marginal cost of funds based lending rate which is a new benchmark lending rate introduced by the Reserve bank of India (RBI) in order to ensure fair interest rates to both the banks and the borrowers.

1. Is a guarantor required for a car loan?

Yes, some banks ask for a guarantor before disbursing a car loan. Your spouse or any individual with a good income can sign as a guarantor or a co-applicant of the car loan. Security is the hypothecation of the car to be purchased.

1. How to ensure I don’t default on my car loan?

When choosing a car loan, opt for an affordable loan amount that is within your repayment capacity. Maintain a low debt-to-income ratio wherein your loan EMI doesn’t exceed more than 50% of your income.

1. What is a loan against car?

Few banks offer loans against cars wherein the borrower can obtain a loan against an old car. The loan amount will depend on the value of the old car and the interest rate will depend on the loan tenure. A loan against car can be used to purchase a new car to replace the old one.