Eligibility Criteria For A Car Loan

Eligibility Criteria For A Car Loan

In the past, owning a car was a huge deal. It was a lengthy, drawn-out operation with a lot of paperwork until about a decade ago. Today, one can book a car and drive it back home in a matter of days! Most financial institutions now deliver convenient terms and conditions, making it simple to get a car loan.

Most major banks approve car loans in as little as a day or two, making it simple to get your hands on your dream four-wheeler in no time. The most important thing to do about getting a car loan is to make sure you’re eligible.

Do you have questions about the Eligibility Criteria for Car Loan and what you can do to improve your odds of being approved? Dialabank provides you with all of the details you need about auto loan eligibility from the most reputable institutions.

Get a trustworthy guide to selecting the best car loan for you so you can make the best decision and apply for the best car loan right now.

What are the Eligibility Criteria For A Car Loan?

The car loan eligibility requirements are as followed:

SALARIED INDIVIDUALS

Eligibility Criteria for a Car Loan

1. Minimum age of Applicant: 21 years.
2. Maximum age of Applicant at loan maturity: 58 years.
3. Minimum employment: 1 year in current employment and a minimum of 2 years of employment.
4. Minimum Annual Income: Rs 100000 net annual income.
5. Telephone: Must be at the residence.

SELF – EMPLOYED 

Eligibility Criteria for a Car Loan

1. Minimum age of Applicant: 21 years
2. Maximum age of Applicant at loan maturity: 65 years
3. Minimum employment: At least 3 years in business
4. Minimum Annual Income: Net profit Rs. 60000 p.a. for standard cars and Rs.100000 p.a. for mid-sized and premium cars
5. Telephone: Must be at the residence

PARTNERSHIP FIRMS 

Eligibility Criteria for a Car Loan

1. Minimum Income: Net profit Rs. 60000 p.a for standard cars and Rs.100000 p.a. for mid-sized and premium cars.
2. Minimum turnover: Turnover Rs. 4.5 lakh.
3. Telephone: One phone at least at business and the residence of the loan executing partner.

PRIVATE LIMITED COMPANY

Eligibility Criteria for a Car Loan

1. Minimum Income: Net profit Rs. 60000 p.a for standard cars and Rs.100000 pa for mid-sized and premium cars
2. Minimum turnover: Turnover Rs 4.5 lakh
3. Telephone: One phone at least at business premises

PUBLIC LIMITED COMPANY 

Eligibility Criteria for a Car Loan

1. Minimum Income: Net profit Rs. 60000 p.a. for standard cars and Rs.100000 p.a for mid-sized and premium cars
2. Minimum turnover: Turnover Rs 4.5 lakh
3. Telephone: One phone at least at business premises

How To Improve Your Eligibility Criteria For A Car Loan

If you’re having trouble fulfilling the minimum qualifying standards for a car loan, there are a few items you can do to help:

Pay off pending loans – You must pay off all unpaid debts or obligations right now. It would lower your debt-to-income level and increase your eligibility criteria for a car loan. When pursuing financial aid, debt control is critical.

Bring in Co-applicants – When you need to demonstrate a better revenue stream, it’s a good idea to have a co-applicant in your car loan application that is also receiving. This strengthens the financial foundation, and banks will be more confident in their ability to repay. Your spouse, husband, father, mother, or siblings may all be co-applicants. It is not necessary to purchase the vehicle under their name.

Boost your credit score – When a bank accepts a car loan, one of the most significant criteria it addresses is the applicant’s credit score. This reveals the truth about the applicant’s financial situation. To boost your credit score, you must pay off all unpaid credit card balances or debts. It’s not a good idea to throw out your card entirely because it would and your unused credit balance for day-to-day purchases. It is, however, important to keep your revolving debt in good standing to improve your credit score.

Factors Affecting Car Loan Eligibility 

While applying for a car loan is easy, it is also critical to verify that you meet the eligibility criteria for a car loan. This lets you prevent any complications in the process and increases the risk of being turned down for a loan. The eligibility criteria for a car loan are influenced by several factors.

Credit score – Before approving a car loan, the bank can take a look at your credit score in the account. This reflects your creditworthiness and true knowledge of your financial position. It would be simple for you to get a car loan if your credit score is excellent. If your score is poor, your application is likely to be denied.

Kind of Car: Your car loan eligibility is determined by the kind of car you choose to purchase with car financing. According to the characteristics and specifications of the vehicle, each model would have a unique resale value. As a result, if the vehicle you choose has a high resale value, your car loan eligibility would be high as well. Since a vehicle is a commodity whose worth depreciates with time, its resale value is considered when determining eligibility.

Age –  Many banks have a minimum age limit of 18 to 21 years old to qualify for a car loan. It’s still a good idea to pay off the debt by the age of 65. Banks favour candidates who have worked for a longer period of time, i.e. have a greater amount of years on the job, so their financial situation would be stronger.

Your Employer’s Reputation: Your employer will be able to assist you in strengthening your auto loan eligibility. If you work for a Fortune 100 company or another high-ranking company, for example, your loan eligibility will increase. You would be able to get a larger loan balance to fund the cost of your vehicle in this manner. If you do not work for such a corporation, though, you must receive a high income to be eligible for a larger loan sum.

For candidates, employment status and company continuity are important considerations-If a salaried person is applying for a car loan, he or she may have worked for a minimum of one year and a maximum of two to three years in his or her current role. If the claimant is self-employed, they must have worked in the same sector for at least two or three years.

Income status – The overall debt amount you are eligible for is determined by the income level. You may add your partner or any other earning member of your family as a co-applicant if your compensation is less than the specified threshold requirement. It will have good support for your application and qualify it against the loan’s conditions.

Debt – When you apply for a loan, the bank will look at your debt-to-income ratio. If you have another debt that you are paying off, you can finish it as soon as possible because it may prevent you from having a car loan. To improve your odds of receiving the loan, you can pay down your existing loans as soon as possible.

Relationship with Your Lender: If you currently have an account with a bank and have a decent relationship with them, you will work out a deal with them to get a larger loan accepted at a lower interest rate.

Compare Car Loan Rates and Eligibility of All Banks

Advantages of a Car Loan

Since it is a long-term undertaking, a loan is a big liability. Although buying a car with cash has many advantages, taking out a car loan has its own set of advantages. Some of the advantages of a car loan are mentioned below:

• When you don’t have enough money to buy your dream four-wheeler, a car loan will help you out. With a car loan, you can drive your favorite model home.
• After putting down a large down payment on a high-end model vehicle, you can conveniently buy one with a car loan.
• If you have never borrowed before, you are unlikely to have a credit score. You are welcomed to the credit world by taking out a car loan. You should start improving your credit score, which will help you get better terms on future credit.
• A car loan encourages you to skip the hassles of public transit and arrive at your office without any inconvenience.

How Can You Apply for a Car Loan?

You should Apply For a Car Loan to acquire your favorite four-wheeler after you’ve calculated your budget. You may apply online or in-person at a local bank branch or car dealership depending on the eligibility criteria for a car loan.

Online: It’s quick and easy; all you have to do is go to the lender’s official website to apply for a loan. You will fill out your personal and contact information on the website, and a bank representative will contact you to walk you through the process. After you’ve chosen the vehicle you want to purchase, the lender will ask you to send the necessary paperwork for clearance. Your car loan will be disbursed after you have been authorized and have agreed to the charges and rates.

Visiting the Branch: You can easily step into every local branch of a bank or lender where you have a checking account to open an account. You should fill out the application form and send it along with the paperwork that needs to be approved. If you have been accepted for the loan, the funds will be disbursed.

Car Dealer: The car dealers that run the showroom will have a contract with a specific lender. You may apply for a loan right there in the showroom, which can speed up the process. If the loan has been accepted, you can drive your car home.

Manufacturers: In some situations, the manufacturers themselves provide lower-interest loans to car buyers. You will apply for a car loan and buy the vehicle right there in the showroom.

Car Loan Eligibility Calculator

The eligibility for a car loan is determined by several factors. A person may use a car loan eligibility calculator to get an estimate of how much he is entitled to borrow. To determine qualifications, the calculator takes into account a variety of considerations, including salary.

The borrower may also find out which lenders can provide him with the expected car loan sum under his qualifying conditions using the eligibility calculator.

It saves you money and resources by eliminating the need to contact each lender individually.

A loan providing Bank or NBFC provides a loan to applicants that meet the demands of the following factors:

• Income Levels
• Stability of Income
• Car Model 
• Credit History
• Your Employer’s Category
• Salaried Employment Status
• Self-employed Industry Longevity 
• Relationship with Lender 

How to Calculate Used Car Loan Eligibility for Banks 

The maximum amount of car loan you can get is determined by two factors.

1. The overall EMI you are eligible to spend is determined by the value of the car you are purchasing.
2. Some banks calculate the maximum loan balance as a percentage of the ex-showroom volume, while others use the on-road price. As discussed below, the two are not the same:
3. The car’s ex-showroom price includes customs tax but excludes state duties and statutory costs.
4. The on-road price includes the ex-showroom price as well as the costs of licensing, insurance, octroi, local entry fee, road tax, and any accessories. The on-road price is typically 15-25 percent higher than the ex-showroom price, and it varies by city.

Eligibility Criteria For A Car Loan In Axis Bank

Eligibility Criteria For A Car Loan In State Bank of India 

Eligibility Criteria For A Car Loan In Private Bank 

You will use the ‘Auto Loan Eligibility Calculator‘ on Private Bank’s official website to determine your eligibility for a car loan. To determine your qualifications, you’ll need to input information including your phone number, place of residence, kind of job, the car model you want to buy, ex-showroom price, and so on.

Eligibility Criteria For A Car Loan In HDFC Bank 

The following individuals/entities are qualifying for an HDFC Bank car loan:

• Individuals who earn a living
• Sole proprietors who work by themselves
• Individuals that are self-employed or practitioners who work with a collaboration company
• Individuals/professionals who work for themselves and run their businesses
• Directors and self-employed persons in public-limited corporations

Following are some of the best car loan products you can opt for in 2021:

Leading Car Loan Providers

1. HDFC Bank Car Loan
2. Bank of India Car Loan
3. Axis Bank Car Loan
4. Punjab and Sind Bank Car Loan
5. Andhra Bank Car Loan
6. Dena Bank Car Loan
7. Punjab National Bank Car Loan
8. Karnataka Bank Car Loan

FAQs on Eligibility Criteria For A Car Loan

✅ What are the eligibility criteria for a car loan?

A car loan can be obtained for a term of one year to seven years by salaried people, self-employed workers, and businessmen between the ages of 21 and 60. Depending on the value of the vehicle and the amount of EMI you will spend on car loans, banks offer car loans up to 100% of the ex-showroom costs.

✅ Can I get a 100% car loan?

Yes, banks offer auto loans up to 100% of the vehicle’s ex-showroom costs. The car’s ex-showroom price includes customs tax but excludes state duties and statutory costs. Banks, on the other hand, assess borrowers’ repayment potential depending on the car’s expense.

✅ How can I get a low-interest rate on a car loan?

With a decent credit score and consistent wage, you will get a low-interest rate on a car loan. Individuals who have a good history with a bank could be eligible for low-interest loans.

✅ What is the maximum age limit to apply for a car loan?

The upper age limit is normally set between 60 and 70 years old. It varies, though, from one lender to the next. It is recommended that you repay the loan before you hit the age of 65.

✅ Can I make part-prepayment on the car loan?

Just a few lenders have the alternative of partial prepayment. You have the option of selecting a lender that provides this service. You will also be paid a portion of the principal balance if you prepay or partially prepay the loan.