Auto Loans in India are available both for the
new cars and old cars.
Auto Loans
With a plethora of auto loan opportunities available in India these days, it is now possible for you to buy your dream car within a matter of days. No need to save up money for making complete down payment at the time of buying. Just gather enough amount for the initial payment and pay the rest in easy installments, by taking up a loan. The best part about auto financing is that, apart from the new cars, loans are available for old cars as well.
After you have decided to take an auto loan, check out the various finance schemes available in the market. After undertaking a thorough research of each and every scheme, you will need to pick the one that suits you the most, in terms of interest rate, monthly installments, duration, and so on. The size of the loan will depend upon the cost of the vehicle and its type (standard or premium), along with the percentage financing you want or are being offered.
In case of a new car, up to 90% of cost of the car is finance, while the percentage gets reduced to 80% in case of old car. However, the financiers might have different terms for different models. For example, Maruti 800 has a high resale value. In case the buyer defaults and the finance company has to sell the car, to get back their loan amount, it would be able to get a higher value. Therefore, the finance company may give higher percentage of finance in such a case.
There is no necessity for any collateral to get a car loan. Usually, the bank or finance company hypothecates the car in its name. The endorsement for hypothecation is made in the Registration Certificate (RC) book of the vehicle, which gets cancelled after the loan is repaid. Usually the tenure of auto loan varies from 1 to 5 years. However, there are some banks with schemes that offer loans for 7 years as well.
General Features
- In case of a new car, loan amount is up to 90% of cost of the car.
- In case of used car, loan amount is up to 80% of the car.
- The maximum loan amount is up to 3 times the annual salary (for salaried professionals) or 6 times the annual income (for self employed professionals).
- Banks generally offer a preferential treatment to their existing customers. If you have savings or current account with a bank, it is easier to get the loan and you might also get preference in terms of rate of interest.
- Loan is given for a period of 1 to 5 years.
- If you want to go for an early settlement of the loan amount, certain charges are taken as a penalty.
- For the purpose of auto loan, the interest is calculated on compound basis.
- There is also a minimum amount of auto loan that you have to take from finance money.
- In case you have been declared bankrupt, applied for bankruptcy, defaulted in some loan in the past or a court case pending against you, it will be very difficult for you to get an auto loan.
- The rate of interest for an auto loan differs from one bank to the other, while the minimum is somewhere around 10-11 percent.
Eligibility Criteria
- Minimum Age of Applicant While Applying For Loan: 21 years
- Maximum Age of Applicant at Loan Maturity: 58 years
- Minimum Employment: 1 year in current employment and minimum 2 years of employment in general
- Minimum Annual Income: Rs 100,000 (net)
- Telephone: Must at Residence
Documents Required
- Proof of Identity (Copy of Passport, PAN Card, Voters ID Card or Driving License)
- Income Proof (Latest salary slip with form 16 - for salaried individuals or IT returns for the last two financial years - for self employed individuals and professionals)
- Address Proof (Copy of Ration Card/Driving License/Voters Card/Passport /Telephone Bill/ Electricity Bill/Life Insurance Policy/ Pan Card)
- Bank Statement (For the last 6 months)
- Two passport size photographs
