Blog #ICICI Car Loan

One can avail of car loans very easily at a very attractive Interest Rate. Interest rates may vary according to different lenders. A borrower should always compare different banks and non-banking financing companies(NBFCs) before applying for a car loan. Car Loan Interest Rate may also vary depending on the car model, age etc. Eligibility of different cars may vary. One should be well aware of all the processes before applying for a car loan. 

ICICI car loan can be availed easily by submitting the required documents. The bank offers a very attractive interest rate on car loans. The interest rate on car loans at ICICI is as low as 10.75%. One can avail of various discounts on car loans just by applying at ICICI. The bank is recommended for getting a car loan. 

The process of application is very simple and easy. After submitting the required documents, one can get approval faster. Financing a car has become easier nowadays as anyone with a good credit report can easily get approval for a car loan. One can also visit online websites or apps of the bank or non-banking financing companies(NBFCs) for more information regarding car loans and different schemes available. 

One can apply for a car loan easily. A borrower can choose to apply for a car loan either online or offline as per convenience. The process for applying for a car loan is mentioned below:- 

• Check the eligibility of your car with your lender. The eligibility of the car might change depending upon the age of the car and the model of the car. Before applying one should check the eligibility of the car. 
• Apply online or in-person, whatever is more convenient for you. The online application process is faster and paperless. 
• After filling the application form, decide the tenure of the loan amount. Deciding on tenure is a very important step. Many banks and non-banking financing companies(NBFCs) offer different tenure on the car loan. A borrower must select the tenure as per the financial conditions.
• The next step is to submit the required documents to the lender. The required documents include:-  Passport Size photographs, Aadhar Card, PAN Card, Valid Driving License, Valid Passport, voter id card, Salary slip, Income tax return documents, Employment proof, Bank statements, Income proof, Age proof and  A credit score of 750 or more.
• After submitting the required documents your documents are verified by the bank or whichever financing company you choose. After the verification of the documents, your loan is approved. 
• After the approval, you can easily purchase the desired car. The documents verification takes upto 24 to 72 hours. 

Conclusion 

The process of applying for a car loan requires proper documentation and a good credit report. Getting a car earlier was a very big deal because of its high price but these days getting a car is not a big deal. Anyone can finance a car from almost every bank and non-banking financing companies(NBFCs). This has become a very common loan. One cannot imagine a life with a four-wheeler. A four-wheeler has become a very important part of daily life. It is one of the most convenient mediums of transportation. 

In the coming times, the demand for car loans is going to increase more.  One can also avail of various discounts and schemes offered by various lenders on car loans. One can also apply for a joint car loan in times of financial difficulties. A joint car loan reduces the burden as it is divided between two people. The lenders provide joint car loans easily if the co-signer is related to blood. For getting more information about car loans one can refer to the above article. The entire process of availing of a car loan is mentioned above.

Also read this: Importance of insurance while obtaining a Car Loan 

Each bank and the financial institution offers different schemes for car loans. 

The borrower has to consider several factors while obtaining a car loan -

Deciding the car : 

The first factor to consider while applying for a car loan is to extensively research cars and their models. Costs such as maintenance, insurance, fuel, etc., should also be considered. The borrower should also decide whether they want to purchase a new car or a used car. Finally, the borrower should finalise depending upon a car based on their budget and capacity to repay the loan amount without defaulting.

Credit score :

The borrower should consider their credit score before applying for a car loan. The borrower’s credit score determines their eligibility and the interest rate of the car loan. A minimum credit score of 750 is considered beneficial for the borrower.

Interest rate :

The borrower should consider the interest rate charged by the bank or the financial institution. A low interest rate is advantageous for the borrower. This is because it directly affects the equated monthly instalments to be paid by them; the lower the interest rate, the lower the EMI. Hence, they would save more money with a low interest rate.

Repayment capacity :

The borrower should consider their repayment capacity before availing of a loan. In addition, they should consider their existing debts, if any. Finally, they should use the car loan EMI calculator available on the bank’s website to calculate the EMI they would have to pay on availing of a car loan. Then, the borrowers should calculate different combinations of loan amount and loan tenure to figure out the one that fits their requirements.

Tenure :

Based on their repayment capacity, the borrower should consider the loan tenure, whether short-term or long-term. In a short-term car loan, the monthly instalments are bigger, but the interest rate charged would be less, and they would get rid of the debt faster. In a long-term car loan, the monthly instalments would be smaller, but the interest rate charged would be higher, and it would take more time to get rid of the loan. The borrower should decide on the tenure based on their repayment ability and financial requirement.

Prepayment and foreclosure charges :

The borrower should consider the prepayment and foreclosure charges on the car loan. Prepayment allows the borrower to pay off the loan amount before the tenure end and save up on interest; however, banks charge a fee on prepayment and foreclosure. The penalty rate differs in every bank, so the borrower should decide accordingly.

Loan to ratio value :

The borrower should consider the loan to ratio value on the car loan offered by the lender. Many lenders offer a loan to ratio value of upto 100% on both new cars and used cars. 

Processing fee :

The borrower should consider and compare the processing fee charged by each bank and financial institution. The lower the processing fee, the more the money saved by the borrower. Such information is available on the website of the bank or the financial institution.

Insurance :

It is a wise decision to take insurance cover on the car purchased. However, the borrower should consider doing their research on insurance covers rather than accepting the one offered by the lender because the lender offers a cover from an insurance company with whom they are affiliated, so the borrower may not get the best deal. 

Other factors :

The borrower should also consider other factors such as the service tax, acceleration clause, offers and discounts, etc., on the car loan.

ICICI car loan provides detailed information regarding the loan process, interest rates, processing fees, eligibility criteria, documentation, etc. Any individual can access this information on their website and use it to make the right decision while obtaining a car loan. The borrower has to repay the principal amount in addition to the interest charged upon it during the decided loan amount.
Also read this: What benefits i will get from car loan 

WHAT IS A CAR LOAN?

A car loan is regarded secondly as an automobile loan. As the name suggests, a car loan means a loan that a person takes to purchase a car and pays back the amount of that car with interest in equated monthly instalments (EMIs).A car loan allows a person to get a car that he wants to buy, the person only has to make the down-payment, and the bank gives everything else. When the money has to be returned, the person has to pay back the amount with interest. There are different interest rates on various loans. Also, different banks offer different interest rates. For instance, ICICI car loan offers a 7% interest rates on such loan which is one of the most competitive intrest rates in the segment.

HOW TO SELECT THE BEST CAR LOAN?

Various banks provide varying interest rates as The interest rates determine which loan is suitable for you or not. If the interest rate is higher, you will have to pay the EMIs in a higher amount, and if the loan has a lower interest rate, it will definitely be beneficial for you. Also, different banks offer different schemes on car loans for their customers to attract.You can compare different interest rates online available on the different websites of the banks. After comparing at least 5-6 interest rates, you can finally choose the car loan which is suitable for you. ICICI Bank Car Loan offers the best car loans that are worth upto 100% of the on-road price of the vehicle that you desire, along with a tenure of upto seven years and attractive interest rates.

BENEFITS OF A CAR LOAN: - A car loan is beneficial in a lot of ways. Following enlisted are the benefits of a car loan: - 

1. Easy loan application: - the whole process of applying for a car loan is so simple. You can simply apply for a car loan online while sitting in your room.
2. Minimal documentation: - There is minimal documentation. Not many documents are needed; just basic documents are required like identity proof, address proof, etc.
3. Quick and easy loan procedures: - The whole process of applying for a car loan is very quick and easy at the same time. Once you are eligible and fulfil all the criteria, your loan would be finally approved by the bank.
4. Attractive interest rates: - Different banks offer different interest rates on car loans. Many banks tend to offer the lowest car loan interest rates to attract customers, and also it will be beneficial for the customers.
5. Diverse loan options based on the requirement: - There is a wide range of options available for loans for home, cars, etc. You can check the loans and apply for the one that you want. 
6. Varied repayment options: - there is a wide range of repayment options; you can repay with cash, credit card or bank account. Some banks also offer no advance EMI repayment.
7. All segments of customers are covered: - No matter whether you own a private business or a salaried employee, you can apply for a car loan, provided that you fulfil certain conditions.

FEATURES OF AN ICICI BANK CAR LOAN: - 

1. The borrowers of the loan can apply to get instant approval and also faster processing.
2. ICICI Bank provides car loans upto 100% ex-showroom price of the vehicle.
3. The car loans of the ICICI Bank also come with a low interest rate and the tenure of the loan repayment of upto seven years.
4. ICICI Bank provides loans upto 80% of the value of the pre-owned cars.
5. ICICI Bank doesn’t charge any foreclosure charges on a Car Loan. 

The demand for a  car loan is high because everyone wants to get a car and live a luxurious life. A car loan helps us get the vehicle that we want to purchase with equated monthly instalments as a payment option with interest.

There are a number of banks and Non-Banking Financial Companies (NBFCs) that give the facility of car loan to their customers. You can easily fund your car using these loans and take your dream car home with you.

But there are numerous other factors that affect the car loan and should be kept in mind while applying for a car loan. And one of the most vital factors is a credit score. If you have a bad credit score, it can reduce your chances of getting a car loan approved by the bank.

How to get a car loan with a low credit score?

A large number of people in India have low credit scores. Still, some banks allow those customers to make their dream come true by availing of a car loan. So lenders have given some fantastic methods by which you can apply for a car loan with a low credit score. The methods are:

Down Payment

If your credit score is low, then you can volunteer to pay a considerable amount as a down payment for your car. A high down payment will lower the loan amount. And the Car Loan Interest Rate associated with it. Banks need some kind of assurance that you will repay the money because your credit score is low. And credit score shows your creditworthiness. So if you make a huge down payment, that will give banks an assurance that you've paid half the amount now. Only a small portion of the principal amount is left.

Repayment capacity

Banks do give the EMI facility to their customers. But the EMI doesn't exceed 60% of your income. So always take a loan amount according to your repayment capacity, and income has to be according to the loan amount you take. Some banks do offer more money but don't fall for that trick. And remember that you'll have to repay that money along with the interest rate and if you're unable to pay that, then your car will be seized. You can plan your budget using some online tools like the EMI calculator. Where you'll have to enter the loan amount, interest rate and tenure, then click submit. It'll show you the interest you'll pay and the EMI that you'll pay every month.

Multiple loans

Don't take multiple loans or debts at the same time. Because if you're unable to pay those debts at the same time, then it will affect your credit score. And banks check credit history before approving the loan application, so if you've taken multiple loans, then banks will look at you like you're hungry for credits/money. And if you're unable to pay those debts, then banks will decide that you are a red flag, and you don't pay your EMI on time.

Co-signer

If you have a low credit score, then you should apply for this option. A co-signer is someone that will take the responsibility of repaying the loan amount along with you. It can be anyone, your friends, family or relatives. You can borrow their credit score and income capacity to be eligible for this loan. But be sure to choose a co-signer that has a high credit score and high-income capacity because a high credit score will help you get a lot by giving low-interest rates or any other profits.

Documents

Read all the paperwork given to you related to car loan carefully. Don't hesitate to ask any doubts to your financial advisor or bank manager. It's necessary for the customers to know everything before they enter into an agreement. Read all the terms, conditions, fees and charges carefully before deciding anything. Banks like ICICI provide ICICI Car Loan to their customers, after they receive all documents.

Conclusion

There are a lot of options that can give you a discount, so be sure to research everything regarding car loan carefully and then make any decision. Some banks allow you to apply even if your credit score is low. But make sure to pay your current car loans EMI on time to help you increase your credit score.