How To Get Car Loan Sanctioned Easily

A car loan allows people luxury to buy their dream vehicle. As the loan can be repaid over a period of time through regular installments, there is no reason why one should hold back his/her wish. Also, there might be occasions and/or needs when one would like to go for a better car, which means another car loan. But don't fret; a second car loan might not be as gruelling a process as it was at the first time.

Vineet has a car that was bought 4 years ago. For this, he had taken a 3-year loan which was repaid in full. Now he is considering buying a large model for his family and hence is evaluating the various options. He can take another loan from the same institution that funded him the earlier loan. But he is wondering whether it will benefit him in any way or should he look for options from other institutions.

Analysis

A) Quick and painless documentation

Securing the right car loan is the first step in ensuring that the purchase of a car goes off smoothly in all respects. Some effort is involved in this process because one has to take care of a lot of procedures and forms along with the production of documents.
If the entire transaction is completed the first time wherein the loan is repaid as per the given schedule then the institution with which the loan is serviced now has a track record for you and the manner in which you behave. If you have made your repayments regularly and on time, then it would lead to building up of a strong record.
If Vineet decides to go with the same institution from which he has taken the earlier loan then he might have to follow an easier procedure with respect to completion of the details. Another benefit would be the bank will do all the paperwork and just send across the final documents that need to be signed by Vineet because all the approvals are already given.

B) More room for negotiation

The entire process of convincing the bank that the customer is a sound one has been taken care of because of the past experience.
There might be some negotiations that might be required because of the fact that the interest rate would have to be acceptable to both parties. The bank is also usually willing to make some room in terms of the rates in such cases and hence Vineet should be looking to get a good deal on this front also. This would also ensure that the cost of the loan is reduced, making it more affordable for Vineet.

C) Other details
Essentially, the conditions while taking the loan is to ensure that the person taking a loan is able to repay the amount and hence there is a requirement to provide some specific details, confirming that Vineet is still a sound customer. The details include income proof along with various details about the type of car, cost of the car and the extent that would be funded by Vineet as the buyer. Other details required would be the latest balance sheet or the income tax return statements that will confirm what is in the records of the bank already.

Overall situation
On the whole selecting the same bank will make the process smoother for a borrower because of less amount of paperwork in most cases, especially private players, but the real issue is the cost. If there is a lower cost loan being available in the market then this could be the main area of attention for a borrower.