Over the years, processes have changed and evolved to make things simpler for car buyers. Personal finance or bank car loan rates- both are available at competent rates of interest. Everything is done bearing the ease of the car buyer in mind. From simple repayment of loans to low-cost EMIs, one should not think twice before applying for a car loan in India. There are several factors that decide your car loan eligibility and that is what we will discuss in this article today. So let’s take a look at the main factors that impact the approval of a car loan in India.
CIBIL Score - The Credit Information Bureau (India) Limited Score is a credit information company that keeps a record of all the credit-related activities of an individual in India, including repayment of loan and credit card payments. The biggest factor that influences the approval of a car loan in India is your CIBIL score. If you have been up-to-date with your other loan payments and credit-related activities, you will have a high CIBIL score, which will make it easier for you to get a loan. However, if you have a loan default, your CIBIL score is impacted, making it tougher to get a loan.
The period of repayment of a loan - Usually, the car loan repayment period in India ranges from 2 to 7 years. This is the most important step in defining the EMI that the individual will pay every month. If you choose a longer time to pay off a loan, then the EMI amount will be higher. However, if the period of repayment of a loan is shorter, the EMI amount will reduce relatively. The tenure you choose plays a role in the car loan approval process.
Car type and age - Car loan eligibility is impacted by the age of the car you are about to purchase. This can vary between a used car versus a new car. Since the value of a car starts depreciating every year once it is out of the showroom, some lenders might not want to give a big loan amount for over 3 years old pre-owned cars.
Income and occupation - Your car loan eligibility is also dependent upon your monthly/annual income and the occupation you are in. If you have a stable job/ business, it will be easier to get a car loan approval because that showcases that you are capable of repayment without a loan default.
So, keep your car loan documents in place while applying and if your application is airtight, you will get a loan quite simply.
