Today almost it is everyone’s dream to own a car and this dream can be fulfilled easily by taking car loan. Getting a car loan is quite easy. But to find the best rate requires dedicated search. You can apply for car loan with any public or private sector bank and car financing companies. Various banks and car finance companies in India offer loan on almost every car model.
In India car loan is given for new cars, pre-owned cars and car cash-in. There is no upper limit for the amount of a car loan. A maximum loan amount is 2.5 times of your net annual income. Moreover loan can be applied jointly in that case your spouse’s income can also be considered. The loan amount for new car includes finance for one-time road tax, registration and insurance premiums. There is no ceiling on the loan amount for new cars. You have to deposit margin money for new car loan and in some bank for used car loans also. For instance State Bank of India (SBI) country’s largest lender takes margin money on new/used vehicles: 15% of the on the road price.
The eligibility criteria for availing car loan for instance from SBI is:
The maximum repayment tenure SBI has fixed for a salaried person is 84 months and for the professionals and self-employed is 60 months. As a processing fee 0.50% of loan amount has to be paid upfront i.e. minimum amount is Rs. 500 and the maximum is Rs. 10,000. In case of rejection of application after pre-sanction survey 25% of processing fee is retained.
Private sector banks like HDFC Bank, ICICI Bank, Citibank also provide car loan for various models such as Citibank gives loan up to 90% of the car value, for a new Maruti car and 85% of the value of the pre-owned car you want to buy.
In case your pocket does not allow buying a new car then you can go for used car. For used car also loan is available. In fact some banks organize used car loan melas in India. These melas are gaining popularity because of savings in terms of price. When you buy a used car there are various things to be taken care of such as verification of the vehicle ownership, its accident history, maintenance record, quality checks and whether the vehicle is not a stolen one. For an individual it is very difficult to get the correct information about all these factors. In car loan melas it is banks responsibility to take care of such formalities before displaying the car models. There is a norm banks have to give one year warranty on any used car.
The eligibility criteria for used car loan is same but there is one condition for the getting the loan for instance SBI gives loan for used car which are not older than 5 years from their date of manufacturing.
There are certain documentation requirements to be fulfilled for availing loan:
Some of the private sector banks give loan against your car i.e. Car cash-in. For instance Citibank offers loan against your car up to 85% of your car value. Bank offers flexible tenure of repayment from 1 year to 5 years with other simple terms and conditions.