Owning a car used to be a true challenge in the past. The hassle of a long-drawn process would lead applicants to spend days circling the bank. However, things are much better today!
You can book a car within a matter of hours and drive it home too. Besides, if you're unsure, you can also check the eligibility calculator to learn more about your chances of getting a loan.
But what are the car loan eligibility criteria, and how do calculators work?
Let's find out!
Applying for a car loan can be different for business owners and salaried individuals. Here are the basic criteria for salaried and self-employed applicants who want to apply for a car loan:
| Criteria | Salaried | Self-employed |
|---|---|---|
| Age Limit | Salaried applicants must be between the ages of 21 and 60 to apply for a car loan. | Self-employed applicants must be between the ages of 21 and 65 to apply for a car loan. |
| Work Experience | Individuals must have had a job for at least 2 years and should have spent a minimum of 1 year with their current employer. | As a self-employed applicant, you must have been in business for over 3 years. |
| Salary | You must be a salaried individual earning over 3 lakhs per annum. | Your business should earn at least 3 lakhs per annum. |
| Other Criteria | Applicants should be able to provide their last salary slip alongside Form 16 to prove income eligibility. | Applicants should be able to provide their latest ITR, showing accurate accounts for the last year. |
Note: Loan eligibility is different based on the borrower's income, existing relationship with the bank, and credit profile.
Thanks to the modernization of banks and the popularity of car loans, you no longer need to spend hours visiting and consulting banks for a possible car loan or the eligibility criteria. Many institutions have a 'Car Loan Eligibility Calculator' on their website to determine your car's eligibility.
The software calculator will determine whether you qualify for a vehicle loan once you've provided some basic information like the sum you need for the car loan, the tenure of the job, and the interest rate, among other factors.
There are several elements affecting eligibility for a car loan. So before you're all set to sign up for a loan, ensure that you check out these factors:
Your credit score is one of the most crucial factors in determining the success of a car loan. Lenders refer to your credit score to determine the success of your loan repayments.
When you apply for a car loan, the lender will likely accept your application if you have a credit score of 750 or above. This range indicates you're a responsible citizen who can pay on time.
Your eligibility for a vehicle loan also depends on the type of vehicle you wish to finance. Since every model has a specific resale value based on the type and vehicle specs, your loan amount will be different. For instance, if the resale value of the automobile you want is high, you'll receive a car loan.
If you're a salaried worker applying for a car loan, you must have credible experience working for at least 2 to 3 years and at least 1 year at the firm where you're currently employed.
Contrary to expectations of a salaried worker, if you're a self-employed candidate, you must have a working history of at least two to three years. Moreover, you'll need to show your ITR as income proof for the loan.
Your lender will review your income levels when you apply for a vehicle loan to see whether you can make timely EMI payments. The lender will believe that you can return the loan without any problems if you have a higher salary.
However, if your salary is low, your lender could question whether you can make timely payments on all of your vehicle loan EMIs. As a result, the lender could provide you with a smaller loan.
The firm you work for may occasionally improve your eligibility for a vehicle loan. For instance, you'll be a suitable applicant for a loan if you work for a well-known firm or another highly-ranked business.
This way, you'll qualify for a higher amount as a loan and a lower downpayment. However, if you do not work for one of these businesses, it is helpful to show you have an upwardly-mobile salary to get better terms on a loan.
Its possible to get low interest on car loans. However, its only possible when you have a good credit profile and a consistent income.
The maximum age limit generally ranges between 60-65 years for car loan applicants.
A few lenders only offer the option of partial prepayment. You have a choice in the lender who provides this credit. For making a full or partial prepayment, you could additionally be charged a set percentage of the loan amount.
Its simple to determine if you qualify for a vehicle loan. To check your eligibility, simply go to the official website of any lender and submit your personal and financial information. Verifying eligibility helps prevent a loan from being denied.
The maximum repayment period on a car loan is 84 months.
No, the criteria for giving you a loan depend on various factors. However, some of the most common features include an age limit, a salary, and residential status.
The EMI generally depends on the interest rate and the tenure for which you're borrowing money. Based on these factors, your EMI can be anywhere from Rs. 10,000 to Rs. 50,000.
Yes, applicants can get a car loan with a Rs. 30,000 salary. However, you must have worked for the firm for at least a year to be eligible to apply.