study ways of raising a loan to buy a car or house
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Purchasing a car is one of the most important decisions that you make in your whole life. It needs plenty of research regarding the automobile market in India, which includes collecting details of automobile loans, particularly if one is purchasing his vehicle through financing. As a matter of fact, not only the new vehicle, one can use automobile loans in spite of the fact that one is purchasing an old vehicle.
Since purchasing an automobile needs a huge amount of investment, most of the car buyers resort to financing schemes at the time of buying their dream car. If one wants to do the same thing, the first thing one should have is a fair idea about the car loan procedures in India. Understanding the car loan procedures in India will help one make the right decision for selecting the most suitable auto loan scheme. There are different types of car loans in India such as margin money scheme, hire purchase scheme, lease financing scheme, security deposit, and advanced equated monthly installment scheme. One's car itself will work as the security against the loan amount.
Fundamental prerequisites for applying
If you want to quality for a car loan, you have to fulfill the following eligibility criteria:
Minimum age of the loan applicant has to be 21 years.
In case of salaried individuals, the loan applicant has to be working in the present company for the last one year or he/she should be employed for minimum two years.
If the car loan applicant is a limited company, it has to be functioning for the last two years as a minimum.
The minimum yearly income of the loan applicant has to be Rs. 100,000 or more.
Maximum age of the loan applicant at the time of maturity of the loan has to be 60 years (in case of salaried individuals) and 65 years (in case of self-employed individuals). This may differ from one financial services provider to another or one bank to another bank. You should verify this prior to applying.
How the car loan procedure works
Car loan procedures in India have some particular steps. One can directly apply to a bank or a financial services provider of your preference. Despite the fact that loan application on paper is the conventional form of applying for a vehicle loan, one can also send an online application since majority of the banks and financial services providers prefer online applications and offer online application facilities. This saves their time and cost. This also saves money and time for the customers. Car loan procedures in India usually comprise the steps given below:
To begin with, you have to directly apply for the automobile loan to the bank or financial services provider of your choice with all the essential paperworks.
As soon as you send an application for the automobile loan, the bank authority will substantiate all your paperworks, residential proofs, and will also carry out some other official procedures.
A credit appraisal will be performed and the amount of loan will be decided once this is carried out, only if the applicant is deemed appropriate for the loan and all the papers submitted are genuine. The loan amount is also dependent on factors such as your income, your age, spouse's income (if any), academic qualification, and overall number of dependents of the applicant. Factors like the total amount of assets, amount of current liabilities, and steadiness of employment are also considered. Your savings and credit history is taken into account. Ultimately, your automobile loan is issued.
Car Loan Repayment Options
The repayment option of your car loan differs from one bank to another. The interest rate and the maximum loan term also differ from one loan product to another. The amount of EMI (equated monthly installment) is dependent on the interest rate, the loan term, and the amount of the loan.
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