Finances that are needed to buy a new or a used car are known as Car Loan. It is considered one of the most complicated loan products around the world that includes numbers of discounts offered by lenders or car manufacturers in the estimation of the total interest rate to be paid by the car buyer. There are three basic types of car loans offered by financial institutes and banks:
- Car loan for purchasing a new car.
- Car loan for purchasing a used car.
- Car loan against an existing car.
As the prices of commodities are rising day by day, it has now become quite difficult to do savings to buy a car. In this situation, car loans are the biggest hope for all middle-class families that are in need of a personal vehicle.
Same as many other borrowing instruments, the car loans are also passed on the basis of typical eligibility criteria. It generally takes into account your credit score as well as your monthly income. A poor credit score can reduce your chances of getting a car loan.
There are numbers of documents that are needed while applying for a car loan:
- Documents for address proof and identity proof.
- Signature proof document.
- Proof of monthly income; it can be in the form of latest ITR acknowledgment or salary slip.
- Proof of job security and business continuity can be asked by the car lender.
- Recent photographs.
The list of documents required for the car loan may vary as per the individual requirements of the lender.
How to get a car loan?
Below we have highlighted a few essential tips and techniques to help you get car loans:
- First of all, you have to estimate your budget to know which car you can afford at present. It is important to evaluate additional expenses as well such as registration cost and maintenance cost of the car.
- Plan the amount for monthly installment as per your budget. It is good to use a car loan calculator to check interest rate, amount of EMI and tenure of the loan.
- It is important to contact the most reliable financial institute or bank to approve your car loan. This step can be a little crucial, but if you have a good credit score, it is easier to proceed ahead.
- This is time to move to the dealership to buy your dream car. Make sure you have done enough research beforehand to pick the most suitable car.
- It is time to check available discounts and festive season offers that can help you lower the bank loan interest rates.
Any questions on car loans? We’re here for you.