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Car Loan For the New and the Old Ones

Today almost it is everyone’s dream to own a car and this dream can be fulfilled easily by taking car loan. Getting a car loan is quite easy. But to find the best rate requires dedicated search. You can apply for car loan with any public or private sector bank and car financing companies. Various banks and car finance companies in India offer loan on almost every car model.

In India car loan is given for new cars, pre-owned cars and car cash-in. There is no upper limit for the amount of a car loan. A maximum loan amount is 2.5 times of your net annual income. Moreover loan can be applied jointly in that case your spouse’s income can also be considered. The loan amount for new car includes finance for one-time road tax, registration and insurance premiums. There is no ceiling on the loan amount for new cars. You have to deposit margin money for new car loan and in some bank for used car loans also. For instance State Bank of India (SBI) country’s largest lender takes margin money on new/used vehicles: 15% of the on the road price.

The eligibility criteria for availing car loan for instance from SBI is:

  • The age of an individual seeking for loan should be between 21-65 years of age.
  • A Permanent employee of State / Central Government, Public Sector Undertaking, Private company or a reputed establishment or
  • A Professionals or self-employed individual who is an income tax assesses or
  • A Person engaged in agriculture and allied activities.
  • The net annual income of an individual must be Rs. 100,000/- and above.

The maximum repayment tenure SBI has fixed for a salaried person is 84 months and for the professionals and self-employed is 60 months. As a processing fee 0.50% of loan amount has to be paid upfront i.e. minimum amount is Rs. 500 and the maximum is Rs. 10,000. In case of rejection of application after pre-sanction survey 25% of processing fee is retained.

Private sector banks like HDFC Bank, ICICI Bank, Citibank also provide car loan for various models such as Citibank gives loan up to 90% of the car value, for a new Maruti car and 85% of the value of the pre-owned car you want to buy.

In case your pocket does not allow buying a new car then you can go for used car. For used car also loan is available. In fact some banks organize used car loan melas in India. These melas are gaining popularity because of savings in terms of price. When you buy a used car there are various things to be taken care of such as verification of the vehicle ownership, its accident history, maintenance record, quality checks and whether the vehicle is not a stolen one. For an individual it is very difficult to get the correct information about all these factors. In car loan melas it is banks responsibility to take care of such formalities before displaying the car models. There is a norm banks have to give one year warranty on any used car.

The eligibility criteria for used car loan is same but there is one condition for the getting the loan for instance SBI gives loan for used car which are not older than 5 years from their date of manufacturing.

There are certain documentation requirements to be fulfilled for availing loan:

  1. Statement of Bank account of the borrower for last 12 months in case the borrower has an account in the bank.
  2. 2 passport size photographs of borrower(s).
  3. Signature identification from bankers of borrower(s).
  4. A copy of passport /voters ID card/PAN card.
  5. Proof of residence.
  6. Latest salary-slip showing all deductions
  7. I.T. Returns/Form 16: 2 years for salaried employees and 3 years for professional/self-employed/businessmen duly accepted by the ITO wherever applicable to be submitted.
  8. Proof of official address for non-salaried individuals.

Some of the private sector banks give loan against your car i.e. Car cash-in. For instance Citibank offers loan against your car up to 85% of your car value. Bank offers flexible tenure of repayment from 1 year to 5 years with other simple terms and conditions.

Student Car Loans – Is it So Easy?

If you are reading this, almost surely you are a college student searching for student car loans for buying a car. The process of purchasing a car has come to be a lot painless for students. You can submit an application for a student car loan, still if you have bad credit or no credit at all. These car loans for college students help to achieve second-hand cars, qualified used cars and brand new cars in a more accessible way.

Buying a new car by means of an auto loan would help you build your no credit or to fix your bad credit score into a favorable one. Each monthly installment you complete on your new car loan will be informed to all major credit reporting bureau.

Students suffering from poor or bad credit should not face any problem receiving an auto loan with bad credit since the moneylenders are assured; if you don’t comply with the payments your car will be repossessed.

What about the Interest Rates Involved in these Loans

The interest rates involved in a bad credit student auto loan use to be a bit higher than the interest rates for a student with good credit. Nevertheless, if you meet your payments punctually and in its entirety, in a year or so you can apply for a car loan refinancing and obtain an inferior interest rate for your auto loan, no matter what your credit might be. More often, auto loaner agencies won’t ask for a cosigner for car loans if you apply for an amount of $25,000 or smaller. There are a small number of car loan companies that give you the freedom to acquire a car from anyone of your choice. Nearly all financial companies operate directly with the dealers, frequently just with franchised dealers. However, dealers will make their best to locate any brand or model for a used or new car that you could be searching for.

Online lenders are perhaps the best way to achieve your loan. There are a lot of online lenders out there hence the competition in their marketplace is pretty aggressive. Despite the fact that your credit score is not the ideal, you can however obtain a car loan with more than competitive loan terms, since interest rates are lower than ever. While submitting an application for a car loan online, it is imperative that you answer all of the questions on your loan application sincerely and precisely. This will be vital for the lender to provide you with a quote that you can afford.

Previous to applying for a car loan, you should calculate how much you could allow spending. Weigh up the expenses to arise with a payment sum that you can afford. Amongst others, the frequent expenses you will have to face will be Car Loan Payment, Car Insurance, Fuel and Car Maintenance (oil changes, tune-ups, etc.). Several online lenders make available loan calculators that allow figuring out the numbers fast, this will be useful if you need assistance with the calculations. The moneylender could also decide a sum that affordable for you founded on your earnings and other monthly expenses. Obtaining a student auto loan is indeed, as outlined above, a very simple task. Just ensure yourself that you complete your payments fully and punctually every month and you will be on the right path to reaching the car of your dreams. Best of Luck!

Solve Your Auto Loan Trouble and Get Instant Approval on Car Loans

Many Americans drive to work. So, it’s no secret that cars a definite necessity in our country. Over the time, there has been an incredible increase in importance of cars. Sadly, so has been the rise in car prices. Not everyone can afford to make a cash purchase and car loans seem to be the only alternative.

There are misconceptions when it comes to car loans. People often get the wrong impression that credit scores are the sole important thing for getting a car loan. But, the reality is that there are several other things which are important to the lender. If you get them right, then you can easily achieve instant approval.

What Factors are considered by the Lender in Approving Your Car Loan?

Income and Employment

Lenders want you to earn an amount that can at least help you make regular payments. Most set their minimum limit at $1,000. Also, when you have stable job, it helps to pay off debts. So, lenders insist on it.

Credit Score

Credit score and credit history help in ascertaining your debt repaying ability. Lenders can know everything about your credit behavior by taking a look at your report. So, it is important that you remove all errors before applying for a car loan.

Total Debt to Income Ratio

This ratio is important because it manifests your total debts and shows whether your income is sufficient to pay off the debts or not. Lenders won’t offer an auto loan to you if this ratio is over 50% because it will make you a very risky credit borrower.

Term of Loan

Shorter the term, more the savings! This is true as you’ll save money by avoiding paying interest for a longer term. Also, if you agree to opt for a shorter term, lenders will see your financial strength and offer better rates on auto financing.

Vehicle- Requirements

Don’t think that lenders will not have a say in your car buying process. Your new car will be used as collateral and that’s why it is important for lenders to know all about it. They may ask you to avoid few cars and even request you to buy your car from a specific dealer/s. You will also be required to give all vehicle related details. So, be ready for it.

Time at Residence

The longer you live at your residence, the better it is because it manifests stability in your life. It also shows that you are regular in paying off utility bills like rent and electricity.

Down Payment

It reduces your car loan amount which makes it a crucial factor. Money down of at least 10% is essential to reduce your interest rates.

Co-Signer

A co-signer is someone with a good credit score who is ready to co-sign the car loan contract. When a co-signer enters the equation, there is a substantial reduction in risk because the lender can now get back the loan amount from him if you fail to make payments.

How to Secure a Car Loan with Bad Credit?

When you are a poor credit borrower, you must improve on other aspects of the approval criteria. E.g., you can increase the down payment amount and get a co-signer to reduce the risk factor.

Do You Have Low Income?

If you want to apply for car financing but earn a low income, then you can opt for a less expensive car. This will reduce the total car loan cost. Also, a co-signer will help. You can even ask your employer to provide you with an Employment Certificate. Use it as a proof to show that even if you earn low income, you have a steady job.

How to Get Student Auto Loans?

Most students are first time car buyers who have limited knowledge of buying an automobile. They usually have no credit history which makes it difficult to get instant auto financing options. But, students can get a car loan by providing pay stubs of their part-time job income. A down payment and co-signer would definitely prove to be useful.

Now, that you know all about the factors that decide approval, you can solve every car loan problem. So, if you are a first time auto buyer or a student or even have troubles like bad credit score, no credit history, low income, no co-signer, no down payment, etc, don’t panic. Just concentrate on other factors, improve them and your weak aspect will become pale by comparison.