Automobile Loans

Automobile Loans

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For many salaried individuals, buying a vehicle is no longer a matter of luxury; it has become a necessity. Within the crazy metros in India, relying on public transport, can mean: reaching the office late, making your clients wait, and missing out on many opportunities that can take your career or business towards success. It is therefore that many salaried individuals opt to have their own vehicle.

You would obviously need money to buy an automobile, be it a car, a bike or a scooter. It may not advisable for you to use your salary income to purchase your vehicle, as it may strain your finances. One alternative would be to go for an automobile loan. There are many lenders who provide auto loans. These loans, apart from the usual car loans, bike loans and scooter loans, can also be used to purchase second hand vehicles.

Car loans are much easier to get when compared to home loans, or other types of loans. They involve very minimal paperwork and verification. Banks take about two to five days to approve your automobile loan, and will usually remit the money directly to the auto dealer. However, if you go to an online lender, your approval could come in as little as a few minutes. Unlike typical car loans, online lenders will typically give your personal loans, which you can use to purchase your car (whether it be first, or second hand).

Eligibility Criteria for Automobile Loans

Anyone can apply for automobile loans, be it salaried employees or self-employed individuals. However, there is certain standard eligibility criteria that they need to satisfy:

For Salaried Employees

  • Should be between 21 and 60 years of age
  • Should have held a job for at least a period of two years
  • Should have worked with the current employer for a minimum of one year
  • Should earn a minimal annual income of Rs. 1,80,000 (this includes the income of the spouse / the co-applicant too)
  • Should own a telephone or a post-paid mobile number

For Self-Employed Individuals

  • Minimum age of the applicant should be 21 years while maximum being 65 years.
  • The applicant should be in business for a minimum period of two years
  • The annual income of the applicant should be at least Rs. 60,000 (This is in case he is buying a standard car; if it is a mid-size or a premium-car the minimum annual income required would be Rs.1,00,000)
  • Telephone or Post-paid mobile connection is a must

Documents Required for Automobile Loan Application:

For Salaried Employees

  • Proof of identity which could be passport copy, driving licence, PAN card or Voters ID
  • Proof of income (latest salary slip along with form 16)
  • Proof of address (Driving license / ration card / passport copy / voters ID / telephone bill / Life Insurance policy / PAN Card / Electricity Bill)
  • Bank Statement for the previous six months

For Self-Employed Individuals

  • Proof of Identity such as Passport copy, Voters ID, PAN Card or Driving Licence
  • Latest ITR for income proof
  • Proof of address (Driving license / ration card / passport copy / voters ID / telephone bill / Life Insurance policy / PAN Card / Electricity Bill)
  • Bank Statement for the previous six months

Before you apply for an automobile loan, it is always better to shortlist a few lenders and then compare their interest rates, EMIs and various other terms. Also, in case you are buying a used car, make sure you finish your negotiations with the seller of the car before applying for a second hand car loan.

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