Applying for a car loan is one of the most accessible processes. You can simply get a car loan by following some basic steps. Almost 85% of the banks and Non-Banking Financial Companies (NBFCs) in India offer car loans. Although each lender has its process designed to apply for a car loan, the basic procedure and requirements are almost the same for every bank.
There are a lot of variables that should be checked before applying for a car loan. The first and the basic one is to narrow your eligibility criteria. You can quickly check your eligibility criteria by visiting the bank or checking their online website.
The other factors that should be kept in mind are:-
Credit Score:- Check your credit score and then compare it with the bank's requirement. If your credit score is low, then you'll have to make efforts to bring it up. But if your credit score is high, you'll get many benefits, and you can even negotiate the interest rate with the bank.
Repayment:- Check your repayment structure and the tenure you've selected. You can calculate your EMI along with your budget using some online tools like a Car loan emi calculator and then choose the right option for you. However, it is recommended to keep your loan tenure as short as possible to avoid paying more interest.
Loan Amount:- Always choose the loan amount according to your repayment capacity and income. Don't choose an amount that will drain your income or budget too much.
Interest Rate:- There are a lot of banks that offer car loans. So it's better to make your decision after comparing multiple banks along with their interest rates. And then choose the one that provides the lowest interest rate.
After you've decided these things, it's time to apply for a car loan. There are two methods that you can use to apply for a car loan. The methods are:-
Online Application:- The first option is to apply for a car loan using the bank's online website. It is so convenient that you can get your loan approved at the comfort of your home. You get the flexibility to compare and then choose the right one for you. You can also track your application process easily using their 'track' feature. Another advantage of online applications is that the whole process is speedy because you're doing it online, and you don't have to wait in line for your turn. Many banks (like Bank of india car loan or State Bank of India) have created mobile applications for these purposes.
Offline Application:- This type of method has its advantage. The first advantage is that you get to have a verbal conversation with the bank, and you get to present your case more efficiently. So you can talk with the bank manager, and then you can find a solution for your problems.
So after you've selected a method that you'll use to apply for a car loan, then you'll have to move ahead with the procedure.
Application form:- You'll have to fill the application form of the desired bank. Fill out all the necessary details and other requirements.
Documentation:- The next step is to submit all the necessary documents required by the bank. These documents will help you to get through the verification process quickly. Once you've attached all the required documents, then you can submit the form to the bank.
The documents required are:
Identity proof:- Aadhar Card, Pan Card, Passport or Driving
License Income Proof:- Form 16, Bank Statement or Payslip
Address Proof:- Electricity Bill, Telephone Bill or any other Utility
Bill Verification:- After your document submission, the bank will take 2-7 business days to verify your documents and to confirm whether or not your application should be approved.
Disbursal:- And once the bank has approved your application, the loan amount will be transferred to the dealer's bank account within 24 hours. The bank may also provide the dealer with a cheque or a DD ( Demand Draft), but it usually depends on the bank.
Conclusion
There are a lot of banks that provide car loan facilities. So choose your decision carefully after comparing all the options available in the market. You can even consult a financial advisor for help, but make sure that you wisely decide.
Read More:- Car loan availing process offline online