Credit Wisdom

Car Loan Application: Things to Consider

Category: Auto Loan

It’s common these days to own your dream car with no money in your bank. Banks provide various financing schemes in the form of finance for purchasing cars. These schemes come with fixed and floating interest rates for various tenures. The lender finance a certain percentage of the price of the car, quoted as a percentage of the ex-showroom price and the remaining amount is paid as down payment. The car is mortgaged with the banker till the loan is reimbursed. However, before you apply for a car loan, do a little homework for good financial mileage.

Amount of loan
The amount of loan borrowed by the banks and financial institutions depends upon the price of the car, model, employment and income of the borrower. The customer should check the amount that the lender is agreed to deliver.

Tenure and Car Loan Interest Rates
The car loans are accessible for a period of 3-15 years. The interest rates charged can be fixed and floating, and it also depends upon the term of the car loan.

For your car loan application, you would need Proof of income such as salary slips and income tax returns need to be submitted along with ID and Address proof.

Other charges
The processing fees, stamp duty and documentation charges are applicable depending on the banks norms as per loan amount.

Key points to remember
  • The loan attain disbursed within 1-2 days of submitting the essential documents.
  • The interest rates offered on a new car are typically different from those for used cars.
The borrower may possess the invoice and registration certificate of the car. These documents copy required to be submitted to the lender within duration of loan disbursement.

Tags: Car Loan Articles