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Car Loan Eligibility
Salaried individuals must be aged between 20 and 65 years with a minimum monthly income of Rs 30,000.
Self-Employed individuals must be aged between 21 and 70 years.
Car Loan Interest Rates
| Loan Type | Tenure (12-35 months) | Tenure (36-84 months) |
|---|---|---|
| New Car Loans | 10.20%* onwards, based on CIBIL Score and Car Segment. | 9.10%* onwards, based on CIBIL Score and Car Model. |
| Used Car Loans | 11.25%* onwards, based on CIBIL Score and Car Segment. |
Car Loan Documents
- KYC details
- Address proof
- Income evidence
- Business or employment stability proofs
Salaried individuals need recent Salary Slips whereas self-employed applicants must provide Financial Statements or Income Tax Returns. This streamlined process ensures a quick and stress-free Car Loan experience, with partner lenders.
Features & Benefits of Car Loan
When it comes to car loans in India, in general, the following features and benefits are offered. Note that the following is a generalised look at the advantages offered by car loans. Individually, lenders may have highly customized and specialized offerings for their customer base.
- It helps you purchase a car even if you don't have all the money for it right now.
- Most lenders will finance the on-road price of the car.
- This means no down payments.
- With some banks offering financing in the crores, you are not limited in your choice of cars
- Most car loan offerings in India are secured loans. This implies that the car serves as the security/collateral for the loan.
- Procuring a car loan is usually simple when compared to other loan products. Individuals with slightly unsavoury credit scores can also hope to procure one. However, this option differs from bank to bank.
- Car loans in India often offer fixed interest rate options. This means you are always assured of a fixed amount that needs to be repaid monthly.
- Many lenders will offer interest rates based on your credit score so a high score to get you a cheaper loan.
- Loans are provided for used and new cars.
Frequently Asked Questions
What car models are financed by the standard car loan in India?
Unless otherwise specified, almost all small to medium sized cars, Commercial Vehicle Loan, Sports Utility Vehicles (SUV), and Multi Utility Vehicles (MUV) come under the purview of car loans available in India.
When applying for the car loan, do I need a guarantor/ security?
Most lenders in India will not insist upon any guarantors; however, if your annual income does not match up to the expected requirement, then you may be expected to sign-up as a co-applicant and/or guarantor.
What are the commonly available car loan repayment tenures?
Repayment tenures usually range from 12 months to 84 months (1-7 years).
Can I get 100% funding to buy a car?
Yes, certain lenders offer 100% of the on-road price of the car as a loan.
Can I pre-pay the entire loan amount? What are the conditions involved?
Yes, you can prepay the entire car loan and save on vital interest payments in the future. However, most banks will allow the pre-payment option after you have chalked off 6 months on your loan tenure.
What kind of a credit score do you need to buy a car?
Just like with most loans, a high credit score above 750 is ideal. But you can still apply for a loan if your credit score is above 600.
Will my credit score affect the interest rate?
Yes. some banks will offer lower interest rates to applicants with high credit scores.
What is the minimum credit score I need to get a car loan?
When you apply for a car loan, lenders will look for a credit score of at least 750. Some banks may offer you a car loan despite your low credit score but they may charge a higher interest rate.
Should I take a car loan from the car dealership or bank?
Before you apply for any car loan, ensure that you explore all the options available. Once you explore, you will get an idea about the benefits offered by various lenders on their car loans. Compare the benefits offered and pick a lender that fits your requirements. Whether it is a bank or a car dealership, pick the one that offers better interest rates.
Do banks offer finance for used cars?
Yes, many top lenders such as SBI, HDFC Bank, etc., offer loans to buy used cars.
What will lenders look for when I apply for a car loan?
One of the most important factors that lenders consider before offering you a car loan is your credit score, The other factors that lenders look for when you apply for a car loan are your employment status, residence and job stability, income, debt-to-income ratio, etc.
What is the lowest EMI that I need to pay for a car loan?
The amount of EMI (equated monthly installments) that you will be paying towards your car loan will depend on the interest rate, loan amount, and the repayment tenure you choose. You can calculate the EMI by using the EMI Calculator tool available on the The Loan Hub website.
How much down payment do I need to make to buy a car?
Making a higher down payment will mean that you will need to avail a lower loan amount to buy a car. When you avail a lower loan amount, there are chances that banks or lenders may offer you a car loan at lower interest rates.
Is it possible to preclose the car loan availed from The Loan Hub lending partners?
Yes, you can preclose the car loan availed from The Loan Hub lending partners.
In case I'm eligible for a pre-approved car loan, will any KYC documents need to be submitted?
No, you do not have to submit any KYC documents in case you are eligible for a pre-approved car loan.