Compare And Apply For Car Loans

After the launch of small-budget cars in the automobile sector, the demand in car market has increased rapidly. Today, almost every person wishes to buy a car that fulfills his/her needs. If you are also one of them, car loans will prove useful in fulfilling your dream.

Car loans will help you in driving home your favorite car. To make use of car loans, it is essential to choose a right car loan that takes care of your all monetary woes. Our informative case studies, articles, reviews, blogs and news will help you in getting a close purview of available options. Our comparison table, citing different car loans from different banks, will help in choosing a best car loan. It includes State Bank of India, Punjab National Bank, Axis Bank and HDFC. Here, we facilitate the comparison on the basis of varied factors like loan amount, age, city, annual salary, occupation and repayment period. You can also compare among reputed car loan providers to evaluate pros and cons of various products. Our reliable experts' ratings help in evaluating the reliability of loan products. In addition, our users, from the different parts of the country, are writing reviews and sharing their experience with particular product and company.

The use of Internet has simplified the process of loans. Now, you can choose a car loan from diversified portfolio of reputed banks and can apply online, which will offer hassle-free loan disbursement process. Moreover, online comparison of car loans interest rates serve dual purpose of saving time and energy.

Banks are changing interest rate on a frequent interval and to calculate car loan EMI, it is necessary to gather complete information about changing rates. If you do not have this required information and are finding yourself in a perplexed condition, we would advise you to check our latest car loan interest rates, which are updated regularly to ascertain real loan value.

1. What are the factors which need to be considered before opting for a car/auto loan?

   The factors which needs to be considered before opting for a car loan are

   • The cost of the car based on make, model and colour.
   • The amount and type of insurance cover you wish to opt for which is included in the costing of the car. (Only a few banks cover the insurance)
   • The kind of car accessories you wish to purchase for your car which would ultimately increase the cost of the car. (Not all banks fund you for accessories).
   • Initial down payment for the car, which is paid upfront by the buyer remainder of which will be the car loan amount.
   • Percentage of financing available for the car depending on the make, model of the car and the borrowers repayment capacity. This aspect varies according to the lender/banks discretion. Some banks offer up to 90% financing for new cars.
   • In case of purchase of second hand cars the amount of financing is largely dependent on the cars resale value and differs across banks/lending institutions.

2. Who can avail a car/auto loan?

   • Salaried individuals in the age group of 21-60 yrs
   • Self-employed people in the age group of 21 to 65 yrs
   • Partnership firms
   • Public & Private Ltd. Companies
   • HUFs & Trusts

3. How much money can I borrow for my car loan?

   The amount of car loan you can borrow depends on your repayment capacity. This implies an auto loan, which has an EMI that does not exceed 40% of your monthly take home income, where the EMIs for existing loans are also deducted.

   For self-employed applicants, the profit is the benchmark that determines loan value. In order to increase loan eligibility one can opt for longer time frame for repaying the loan since longer tenure means lower monthly EMIs.
   The loan amount you are eligible for is also dependent on other factors like the company you are employed with, residence and credit history.

4. What is the usual borrowing range for a car/auto loan?

   The borrowing range for a car/auto loan differs with lending institutions and also takes into consideration the applicants credit profile. Usually in a car loan the minimum amount is Rs.1 lakh and the maximum depends on the income and other credit profile details of the applicant. Some banks offer around 3 times the annual salary of the applicant in case of a salaried individual and around 6 times the annual income in the case of self employed professionals.

5. What is the minimum and maximum tenure offered for a car/auto loan?

   The minimum tenure for car/auto loan repayments ranges from 1 year (12 months) to a maximum of 5 years (60 months). Few lenders offers car loan for a tenure of 7 years (84 months).

6. Can I get 100% financing for my car?

   Yes, it is possible but in a very rare case. Those banks which offer 100% financing will do so subject to certain terms and conditions and reserved only for certain makes and models of new cars. Again these aspects are based on the sole discretion of the bank/lender.

7. Is it essential to have an account with the bank that offers you a car/auto loan?

   No, it is not essential to have an account with the bank that provides you with car loan. Nevertheless, an account with the lending bank can prove advantageous in a way of faster loan processing and benefits like a top up loan of the original loan value provided upon request etc. in some cases.

8. What are the documents required to process the loan?

   • An identity proof which could either be copy of the passport, PAN card or Voters Id or driving license.
   • Income Proof in the form of usually the latest salary slip with the latest income tax forms (Form 16 in the case of the salaried individual, ITR form in the case of a self employed individual).
   • Residence Proof in the form of a Ration card or Driving license or Voters ID or Passport copy or telephone bill or electricity bill or life insurance policy or PAN card.
   • Sometimes optional: A copy of the bank statements pertaining to the most recent and relevant time frame.

9. Is it essential to give any security or collateral for my car/auto loan?

   The car/vehicle which you purchase out of the loan amount is itself the required security for the loan amount. You will be pledging the car in the banks name and to that effect it needs to be indicated in the RC (Registration Certificate) book of the vehicle as well. In case of default in payment of monthly EMIs the bank has the right to repossess the car.

10. If my income falls short of the required limit in case of a car loan, then can I opt for a joint loan with someone else?

    Yes, you can club the income of your spouse or a parent and take a loan on the combined income. In this case, the spouse or parent becomes the co-applicant of the loan.

11. Can I prepay my car loan? Is part prepayment possible?

    In most cases of car loan prepayment, it is permitted only after completion of 6 months to one year of loan period. Car loan part prepayment is not allowed for most banks. You can only prepay the remainder of the loan amount in full.

12. How is the interest on my car loan calculated?

    Interest rates on car loan can be either fixed flat rates or reducing balance rates. In fixed flat rates, interest is calculated on the outstanding loan amount and is never reduced during the entire tenure of the loan even though you make payments monthly.

    In the case of reducing balance interest rates the EMI is calculated on the basis of daily, monthly, quarterly or annual rests where rests is the time frame where bank will recalculate the EMI based on the amount of loan repaid.