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Submitted by :

VIPIN VERMA
TRIPTI KALRA
AKASH DWIVEDI
Purchasing a car is one of the most important decisions
that you make in your whole life. It needs plenty of
research regarding the automobile market in India,
which includes collecting details of automobile loans,
particularly if you are purchasing your vehicle through
financing. As a matter of fact, not only the new vehicle,
you can use automobile loans in spite of the fact that
you are purchasing an old vehicle.
Since purchasing an automobile needs a huge
amount of investment, most of the car buyers
resort to financing schemes at the time of buying
their dream car. If you want to do the same thing,
the first thing you should have is a fair idea about
the car loan procedures in India. Understanding the
car loan procedures in India will help you make
the right decision for selecting the most suitable
auto loan scheme. There are different types of car
loans in India such as margin money scheme, hire
purchase scheme, lease financing scheme, security
deposit, and advanced equated monthly instalment
scheme. Your car itself will work as the security
against the loan amount.


If you want to quality for a car loan, you have to fulfil the
following eligibility criteria:

Minimum age of the loan applicant has to be 21 years.
In case of salaried individuals, the loan applicant has to
be working in the present company for the last one
year or he/she should be employed for minimum two
years.
If the car loan applicant is a limited company, it has to
be functioning for the last two years as a minimum.
The minimum yearly income of the loan applicant has
to be Rs. 100,000 or more.

Maximum age of the loan applicant at the time
of maturity of the loan has to be 60 years (in
case of salaried individuals) and 65 years (in
case of self-employed individuals). This may
differ from one financial services provider to
another or one bank to another bank. You
should verify this prior to applying.

Car loan procedures in India have some particular steps.
You can directly apply to a bank or a financial services
provider of your preference. Despite the fact that loan
application on paper is the conventional form of
applying for a vehicle loan, you can also send an online
application since majority of the banks and financial
services providers prefer online applications and offer
online application facilities. This saves their time and
cost. This also saves money and time for the
customers. Car loan procedures in India usually
comprise the steps given below:


To begin with, you have to directly apply for the
automobile loan to the bank or financial services
provider of your choice with all the essential paper
works.
As soon as you send an application for the
automobile loan, the bank authority will
substantiate all your paper works, residential
proofs, and will also carry out some other official
procedures.

A credit appraisal will be performed and the
amount of loan will be decided once this is carried
out, only if the applicant is deemed appropriate for
the loan and all the papers submitted are genuine.
The loan amount is also dependent on factors such
as your income, your age, spouse's income (if any),
academic qualification, and overall number of
dependents of the applicant. Factors like the total
amount of assets, amount of current liabilities, and
steadiness of employment are also considered.
Your savings and credit history is taken into
account. Ultimately, your automobile loan is
issued.

The repayment option of your car loan differs from one
bank to another. The interest rate and the maximum
loan term also differ from one loan product to another.
The amount of EMI (equated monthly instalment) is
dependent on the interest rate, the loan term, and the
amount of the loan.
Types of Interest rate
The interest rate for car loans is charged in two ways -
fixed and floating. In case of a fixed rate car loan, the
interest rate stays the same during the entire term of the
loan. On the other hand, in case of a floating rate car
loan, the rate of interest differs in line with the
particular stipulations of the loan agreement.

Several documents establishing your identity, proof of
income and residence are required for a loan. But, the
documents pertaining to the car, new or old are very
important. So even if you are eligible for a loan,
without proper car documents you can not get a loan.
you have to provide the following documents:
Proof of income
Identification proof (PAN card, passport, driving
license, or Voters ID)
Office address proof
Residential address proof
Signature proof

Particulars Salaried Individual
Self-Employed
Individual
Partnershi
p Firm
Private /
Public Ltd
Co
Age
Cri
teri
a
The applicant should be above 25
years old at time of application, and
up to 58 years of age at time of
maturity of the loan
The applicant should be above 25 years
old at time of application, and up to
58 years
of age at time of maturity of the loan

Limited
companies
should have
been in
existence for at
least 3 years
Inco
me
Cri
teri
a
Gross annual income of at least
Rs.4lakhs
Gross
annual
income
of at
least
Rs.2.5la
khs
Firm should
have a
minimum
PAT (profit
after tax) of
Rs.2.5lakhs
Minimum PAT
(profit after
tax)
of Rs.
2.50 lakhs
Stability :The total employment
stability should be more than 2
years and current employment
stability of minimum 1 year
Business stability should be
more than 3 years