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This article states the eligibility required to get car loans. Also read further to know the interest rate on car loans.

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Car Loans in India

Wagons of today can be looked upon as a symbol of family carts, a symbol of prestige, symbol of lifestyle or at times even passion and identity. Whatever the modern day wagon may symbolize, in the end, it is an indication of a person’s hard work and efforts. Car loans are a boon to many such souls working around the clock and across the world. India is a nation that has many banks and these global, private and government banks all provide loans for cars. Efforts of a person at work are valued by adding some comfort to his/her lifestyle on roads.
Eligibility and requirement:-
Car loans in India is available to people who work for companies, people who run business, people who are self employed, pensioners and farmers too. There are few basic requirements for a person to get a car loan. There might be few changes depending on the bank providing the loan.
  • The person must be minimum 21 years of age and above.
  • Tax return documents can be proof of income to self employed, salaried people and also farmers.
  • The maximum age of a person by the end of loan period should be less than 60-65 years (depending on bank and whether the person is self employed or salaried employee).
  • Loans are available for citizens of India.
  • Address proof along with details of whether it is owned, rented or provided by office.
  • Conditions related to working experience in particular field or business. 
Core factors of a car loan:-
Every loan scheme has few basic factors and these factors play a major role while choosing a particular bank and scheme. A few of these factors resemble credit policies that exist in the world from time immemorial.
  • Part of amount provided by the bank: – This is the percentage of amount of cost of a car that a bank provides to a customer. For e.g., if the price of the car is 4 lakhs, and the bank provides 75% of the amount, then a person will have to bear the  other 25%, which means he/she must bear 1 lakh of initial payment to car dealer. This 25% is also known as the down payment.
  • Interest rate: – This is the rate of interest on car loan and this rate varies from bank to bank. Most of the banks in India have floating interest rates. Currently interest rate for car loans in India is between 9 to 16%.
  • Period: – Every loan has a period to pay back and during this period the money will be paid back in installments with interest. This period may start from 12 months and there are banks in India those provide loans with 60 month period.
  • Charges – This may or may not apply to all banks and charges will include loan processing charges, fine for delayed payment of EMI and some banks also charge a small percentage of principal amount in the beginning. 
Benefits of car loan:-
Car loans in India are called a ‘boon’ for reasons that can only be experienced when you own a car.
  • An outing with a family after tough working hours can never be better without the modern day wagons (cars). It is hard to dream of buying a car, saving money for the purpose and sacrificing such pleasant family times.
  • It is a gift to many car drivers in metropolitan cities where these wagons are sources for their living.
  • These loans can be documents of certainty, i.e. a person’s discipline in repayment. Such documents will help him/her in getting other loans if required in future.
  • For commercially used cars (cabs, taxis) there is space for tax exemption on car loans. 

Car loans make space for a person’s wheels on road for which he will be paying a part of his income. One fine day he will be the owner of this wonder on wheels and that day he will be the legal heir of a dream well begun!