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How to finance car loan
Automobile loans are one of the most highly sought after banking services in the country. With the automobile visibility clearly rising on the urban front, technology booming and cars becoming more within the reach of the average middle class household, individuals are flocking to banks in the hopes of procuring car loans. Here are the basic eligibility criteria for all those who are looking to finance car loan.
For salaried individuals:
- The applicant of finance car loan needs to be at least 21 years of age.
- The applicant cannot be over 70 years of age.
- The applicant must receive a minimum annual net salary of Rs. 2.4 lakhs per annum for all approved car models.
- The latest salary slip and Form 16 documents need to be produced for verification.
- The applicant needs to have at least 1 year of continuous employment as proof of their solvency.
For self employed individuals:
- The applicant needs to be at least 18 years of age.
- The applicant cannot be beyond 75 years of age.
- The applicant must possess a minimum annual net business income of Rs. 1.8 lakhs per annum for specified models and Rs. 2.0 lakhs for others.
- The latest ITR must be provided to verify income claims.
- The applicant needs to be engaged for a minimum of 3 years in the same line of trade.
The business must incur an annual net income of Rs. 1.8 lakhs per annum for select models and Rs. 2.0 lakhs for select models.
- ITRs of the preceding 2 years must be produced and audited financial reports of 2 years along with computation of income must be handed.
- Employment of at least 3 years in the same line of business is a prerequisite.
- Various wealth and priority customers having a vintage of half a year can apply.
- A minimum balance of Rs.1 lakh to be paid quarterly for the last 2 completed quarters is a requirement.
- The maximum amount that can be borrowed is 300% of the average quarterly balance recorded in the last 2 months.
Besides this, specific banks offer specialised schemes to their customers with attractive interest rates and EMIs. Here are some things you need to keep in mind when applying for or trying to procure finance car loan facilities.
Student car loans:
Several students wish to finance car loan as it helps while studying. Especially if you are travelling to a new city to study, having a vehicle at your disposal will not only save time but also effort and in the long run prove to be more economical. Student car loans are available at most banks, where you will have t explain your situation first. What you must remember however is to choose your car judiciously. An SUV, for example, is a bad idea for a student budget. Choosing a more fuel efficient and economical automobile will help you in finance car loan and will also prove to be an asset later.
Used car loans:
Most people must be thinking why someone finance car loan to buy a second-hand car. Second-hand cars do not necessarily have to be run down or broken. Several automobile companies have specialised showrooms where they showcase verified, authentic cars in perfect condition, although second hand. Finance car loan on such vehiclesis easier to get and save you a lot of hassle. They have lower interest rates and less tedious document verification processes. Used car loans may come in particularly handy if you are a student or on a fixed income.
Senior citizens finance car loan:
You must be thinking how someone without a stable income can apply for a loan. But senior citizens do have the provision to apply for bank loans in order to finance car loan. Your history of employment is checked thoroughly to ensure there are no loopholes, along with your pension plan. With all this in order, a senior citizen or a retired individual can sign up for a car loan easily.
Buying a car is no easy task. More often than not, it involves pouring in a lifetime of savings into the vehicle you choose to buy. Therefore, it is essential to consider a lot of things before you decide to make up your mind. A car is an investment for life. It is an asset; it is a precious possession. Going for finance car loan can be a beneficial option.
Talk to an expert:
While web research is perfectly exhaustive and reliable, talking to an expert before you make a decision is important. Finance car loan schemes are a big affair, and an expert’s opinion will definitely count. Experts will help you understand your credit score, how you can improve it, what you can do to get loans at lower rates, etc. Each individual’s needs and financial situation is different. Therefore talking to someone who understands your finance car loan requirements specifically is very important.
Consider maintenance options:
Before you buy the car, consider its maintenance costs and how it will affect your EMIs. With monthly instalments to pay, investing in a car which itself entails serious maintenance expenses makes very little sense. It is important to know that the money you are paying will eventually be redeemed. It is for this purpose that some people lease new cars so that the EMIs can be taken care of and there is a steady source of income.
Check for insurance offers:
While seeking finance car loan, it is also possible to simultaneously negotiate insurance schemes. What if the car meets with an accident before your dues are paid? In such situations, you might be under a lot of financial pressure. You may lose the car and still have to pay the rest of the sum. In order to be prepared for such situations, talking about insurance is a good idea.
If you are looking to finance acar loan, then it requires a great deal of preparation. It is important to understand what you need and how to do it. With the right resources, you can own your dream car in no time.