Blog #Yes Bank Car Loan.

Car Loans have become quite popular in the past few years in India. Many people require a car to commute from one place to another. Earlier cars were used for luxury like traveling but now Cars have become a necessity. The need for Cars in India has increased significantly with the advent of urbanization in India. 

The interest rate offered in India usually is 7.25% per annum onwards. Generally, the Loan tenure for Car Loans is anywhere between 1 and 8 years. The processing fees for the application procedure of Car Loans depend upon the Bank you wish to apply to. Car Loans are secured Loans and hence have an attractive rate of interest offering for their consumers.

Eligibility Criteria:

The criteria that are required to be fulfilled by the applicant for the application procedure of Car Loans include the following:

• The applicant’s age should be at least 18 years and below 75 years of age. 
• The applicant should have a monthly income of at least INR 20,000.
• The applicant must either be self-employed or be employed with the current employer for at least the past 1 year. 
• The applicant must be working for a government or private institution or should be self-employed for the past 1 year.

These criteria may vary as per the Banks you apply to. You can estimate your monthly EMI payments with the help of online Car Loan EMI calculators. The requirements for the use of these calculators include the Loan amount, Loan tenure, rate of interest, and processing fees chargeable by the Bank.

Documents Required:

The following Documents are required for the application procedure for Car Loans in India

1. Filled application form for the Car Loan.
2. Proof of Identity of the applicant.
3. Proof of Age of the applicant.
4. Proof of Income of the applicant.
5. Proof of Residence of the applicant.
6. Few Passport-sized photographs of the applicant .

Several Banks may demand few additional documents for the application for a Car Loan. A high credit score can increase your chance of getting the loan sanctioned by the bank or financial institution you applied to. You can check the status of your application via online or offline mode. 

A Car Loan can be the best option available in the domain of finance as these loans are secured and the car itself acts as a security for these Loans. Unlike Personal Loans, these loans offer a pretty simple application process, repayment options, and a lower rate of interest applicable on your loan, amount. These loans can help you in financing your Dream Car that you can you use to commute to various places. The Car that is being placed as the security of your Loan is not even yours. You are not putting any of your assets for the Car Loan application which is not the case in most of the finance options available in the Finance market. 

More and more people are understanding the importance of living a happy and comfortable life and thus even if they can not afford to own a car, they opt for Car Loan schemes to ease the process of transportation for them. You can research and compare all the Car deals available in the vehicle market and also the Car Loans being offered by Banks and other financial institutions in India. You can do your research via online or offline mode. 

The popular Loan schemes available in India for you include the following:

• Bank of India Car Loan.
• Bank of Baroda Car Loan.
• ICICI Bank Car Loan.
• Yes Bank Car Loan.
• State Bank of India Car Loan.
• Axis Bank Car Loan.
• Canara Bank Car Loan.

You can search for more such schemes online that can help you in comparing the offering available for you. The more you research the more able you would become in cracking a better deal and in decreasing your future financial burdens.

Also read this: Wrong Usage OF Credit Card 

What is car loan tenure?

Car loan tenure is the time you are going to be spending in paying back your loan. Before you jump to conclusions, let us understand the concept a little bit. Car loan tenure is the tenure you have to pay the entire amount till you can complete all the instalments. 

Before considering the car loan tenure you should know how long your loan should be. Here is a quick guide to help you choose the right loan tenure. 

How long should you pay for a car loan? 

After you take a car loan, the first question you need to ask yourself is 'how long should I pay for a car loan'. Example: A car loan with a tenure of 20 years, and the amount is for INR 1,30,000 per month. Assuming that your loan tenure for three months, you will have to pay INR 43,333. If your loan is due for six months, you will be able to pay INR 21,666. If your loan is due for nine months, you will be able to pay INR 14444. And finally, if your loan is due for 12 months, you have to pay INR 10,833. But the thing that people often forget is that you also pay the interest rate along with your loan amount. 

What are the factors which affect car loan tenure? 

The following factors can affect the car loan tenure: 

1. Your credit score. 
2. Your current monthly income. 
3. The purpose of the car loan. 
4. Your location. 
5. The kind of car you want. 
6. The condition of your credit.

What should you consider when you choose car loan tenure?

It's a dream to own a car. But when you want to buy a car and fulfil your dream of owning a car, the purchase becomes challenging. Whether you're the one who's going to take a loan or someone who's going to get the loan from a bank, you want to choose a car loan tenure that suits your needs. Once you choose the car loan tenure, you don't have to bother about the loan amounts anymore. 

Car loan tenure is important. However, one thing that you need to take into consideration while choosing a car loan tenure is the interest rate of the car loan. An interest rate of 12-18 per cent is normal for 2-3 year of tenure. But if you want to plan your car's purchase and you are looking for a car loan for 7-10 year tenure then you should choose a bank that provides a low interest rate. Because you will pay the Car Loan interest rate along with the car amount every month. So if you choose a long tenure with a high interest rate, you may end up paying more than the loan amount. 

The right car loan tenure for you:

As a car loan holder, you should be very careful about choosing the right car loan tenure. Remember, no other loan can be as harmful as a car loan. Choosing the right car loan tenure is important. So choose the loan tenure according to your repayment capacity. Always choose the loan amount as 50% of your monthly income. Some banks (like Yes Bank car loan or BOB Car Loan) usually take 60% of your monthly income as EMI. \ So if your monthly income is INR 1,00,000 then your monthly instalment shouldn’t be more than INR 60,000.

Conclusion: Thus, this article concludes that you should definitely consider a shorter car loan tenure. Now you must know that there is more to choosing the right car loan tenure. It's not only about paying the balance in your car loan but it is also important for you to get a car loan that will meet your income and budget capacity. Because if you’re unable to pay the loan amount then your car will be seized and sold off at an auction to recover the loan amount and the interest rate.

Read More:- Car Loan Demand Is High Why?