WHAT IS A CAR LOAN?

A car loan is a type of loan specifically designed for individuals to purchase a vehicle. With a car loan, the borrower takes out a loan to pay for the cost of the vehicle, and then repays the loan over a specified period of time, usually in monthly installments. The loan is secured against the vehicle, which means that if the borrower is unable to repay the loan, the lender may repossess the vehicle.

WHAT ARE THE BENEFITS OF A CAR LOAN?

There are several benefits of taking out a car loan in India, including:

Affordability: Car loans can make it more affordable to purchase a vehicle, as they allow borrowers to spread the cost of the vehicle over a period of time, rather than paying for it in full upfront.

Convenience: Car loans can be convenient, as they allow borrowers to purchase a vehicle quickly and easily.

Credit history: Taking out a car loan and making timely repayments can help improve a borrower's credit history and credit score.

Access to a wider range of vehicles: With a car loan, borrowers have access to a wider range of vehicles, including newer or more expensive models that they may not have been able to afford otherwise.

Fixed interest rates: Many car loans have fixed interest rates, which means that the interest rate will not change over the life of the loan. This provides borrowers with greater stability and predictability, as they know what their monthly payments will be for the entire loan term.

Fixed interest rates: Many car loans have fixed interest rates, which means that the interest rate will not change over the life of the loan. This provides borrowers with greater stability and predictability, as they know what their monthly payments will be for the entire loan term.

Easy to apply for: Applying for a car loan is often a straightforward process, and many lenders offer online applications and quick disbursals of funds.

It's important to note that these benefits may vary depending on the lender and the borrower's credit history and financial situation. Before taking out a car loan, it's important to carefully review the terms and conditions of the loan and to consider factors such as the interest rate, fees, and repayment terms to ensure that the loan is the best fit for your needs.

WHAT ARE THE ELIGIBILITY CRITERIA AND DOCUMENTS REQUIRED TO AVAIL OF THE CAR LOAN?

The car loan eligibility criteria can be different for different banks. The common criteria are as follows:

• Age of the individual must be between 18 years and 75 years
• Minimum net monthly income of Rs. 20,000
• At least 1 year of employment with the current employer
• Must be salaried or self-employed, working for a government establishment or a private company

To prove your eligibility, you’ll need to provide certain documents. Though this too is specific to different lenders, the common documents will be:

• Aadhar card/ Voter Id Card (To verify your name, address proof and nationality)
• Bank Account Details (To transfer the funds)
• Income Proof (To prove that you have a certain earning and are capable of repaying the loan.)