A few years back, applying for a car loan is required you to visit the branch office of a lender personally. The process involved a lot of paperwork and was very time-consuming. However, thanks to the internet, the finance process is now easy and very quick.
However, there are some important things that you consider before applying for a car loan.
Essential steps for applying car loan are as follows:
Before applying for a loan credit score is a very important score that decides whether you are eligible for a car loan or not.
The Credit score is a 3-digit numeric summary of your credit history. Lenders generally require the borrowers to have a CIBIL score of at least 700.
Interest charged on Loan
Car Loan interest rate is the most important factor for applying for a car loan. Different banks offer loans on the attractive interest rate to attract more customers.
You might get a good offer based on your relationship with the bank. However, don’t take it for granted that you will get the best deal just because you hold an account there. Search around for more good offers.
Loan Amount and Time Period
Banks in India now offer up to 100% loan of the on-road price of the as the loan amount based on your credit score. However high loan amount means higher EMI’s amount which you have to pay for your loan amount period. The loan amount time period basically varies from 1-5 years appx, or maybe higher, in general people select between this time period only.
The next step is the Processing fee. The bank charges a fee for evaluating your loan application. This can be either fixed fee or depend upon the loan amount you are applying for.
Banks with low-interest rate may have higher processing fees. So, before starting the car loan approval process, ensure that your bank has a reasonable processing fee.
You can apply for a car loan offline or online nowadays, but you will be required to submit the few documents.
* ID Proof
* Address Proof
* Bank Statements
* Income Tax Return and Income Statements
It is better to have these documents ready before you apply for the loan to make sure that the application process is smooth and your loan is processed as soon as possible by the respective bank.