What Do You Need For Your New Car Loan – Most importantly, you need to know about the eligibility on offer
In our previous article, we covered how motorcycle insurance works. This time we’ll see how a new car loan works. A loan is generally a sum of money you borrow and later on compensate for that money or principle by paying additional interest.
Just like insurance, a loan too has a lot going and can things get a bit complicated, allow us the privilege to simplify it for you.Car loans essentially allow your lender to pay the price of your car after which you repay the lender in installments over a period of time.An important point to note is that these installments are calculated via simple interest and not compound interest. In simple interest, the amount is calculated on the principle, while in compound interest the amount is levied on the original principle which generally saves your money. There are a few terms and conditions that you need to follow before applying for a new car loan
First is complying to the eligibility –
Eligibility criteria for salaried individuals who are applying for a loan
• Minimum 21 years of age
• Maximum 70 years of age at maturity (conditional)
• Minimum Net Annual Salary of Rs. 2,40,000 p.a.
• Income eligibility based on latest salary slip and Form 16
• Minimum of 1 year continuous employment
Eligibility criteria for Self-employed individuals who are applying for a loan
• Minimum 18 years of age
• Maximum 75 years of age at loan maturity
• Minimum Net Annual Business income of Rs. 1,80,000 p.a. for select car models and Rs. 2,00,000 p.a. for others.
• Income eligibility based on latest Income Tax Returns
• Minimum 3 years of employment in the same line of business
Eligibility criteria for self-employed non-individuals who are applying for a loan
• Minimum Net Annual Business income or Rs. 1,80,000 p.a. for select models and Rs. 2,00,000 p.a. for others
• Income eligibility based on latest 2 years. Income Tax Returns and audited financials of 2 years along with computation of income
• Minimum 3 years of employment in the same line of business
Eligibility criteria for Priority/Wealth/Privee customers who are applying for a loan
• Customers with a vintage of 6 months
• A minimum Average Quarterly Balance (AQB) as below:
• An AQB of Rs. 1 lakh for last 2 completed quarters AQB requirement to be met for both the quarters
• Maximum loan amount restricted to 3 times the AQB in the last 2 quarters
Next is the documentation. Required documents have to be presented before applying for a loan.
Documents required for Car loan. are-
• Age proof
• ID proof
• Application form
• Photograph
• Residence proof
• Income proof
• Bank statement
• Signature verification proof
• Pro-forma Invoice or Rate List
The customer has the benefit of selecting the tenure of the new car loan. However, there is a limit for the tenure. Some lender companies restrict the tenure to 5 years, while some raise it to 8 years.What isn’t in the hand of the customer is the interest rate. For a car loan, the rate hovers around that 8% to 10% mark and the customer can apply for the policy which he/she feels is best suited. Mind you that the rate of interest can change based on the tenure.
Along with that, the customer has to pay a variety of additional charges. While the documentation fee can range from 300-500, the processing fee can range up to 3500-5500 (again based on the provider).Other charges included are for safety and transparency like cheque bounce charges, late payment penalty, duplicate statement issuance and a lot more. All these combined sums up the car loans in general.Getting a new car loan can be a task.Hope these points helped clear your thoughts on a car loan.
