What Is Meant By A Flexible Car Loan?

20 Jul

Loans are financial saviours at times of monetary requirements and needs and the licensed lenders of the nation i.e. banks and Non-Banking Financial Companies (NBFCs) sanction these loans to an infinite number of customers. A car loan is one such loan that is specifically designed to meet the commercial requirement of financing or maintaining a car. The loan sanctioned is secured which means the bank or NBFC you are opting for the loan on demands an asset as collateral to be pledged. A car new or old is the asset demanded, and the complete ownership of the car is retained to the borrower (car owner) only after he/she pays off the loan amount with interest.

A car loan is highly flexible and convenient because of its highly advanced and beneficial features that the banks and financial companies update time and again. Benefiting from a car loan is simple, an applicant can opt via the digital or the conventional offline mode. The online mode includes filling in the basic details (name, age, address, etc.), scanning and uploading the required documents and stating the loan details (loan amount, tenure, etc.). The lender will contact the applicant later on for further details. The face to face mode is as simple as the online mode, and the disbursement of the loan amount is done within hours of the car loan’s approval.

Car loans in India are provided by many banks and financial companies. However, not all lenders have the best and better-suited features. The Punjab National Bank is one of the prominent banks that provides exceptional commercial services. The PNB Car Loan has highly favourable features and terms that one shouldn’t definitely miss. The official website of the bank provides all the necessary details of the car loan.

A car loan, although easy to avail, has certain eligibility criteria that an applicant has met in order to be a car loan debtor. The age of the car loan applicant should be in the range of 18 years to 65 years in most banks and financial companies. However, a few lenders demand a minimum age of 21 years. The applicant should be a working professional. Either of the following categories is accepted: salaried employees (private companies or public organizations), self-employed individuals (private and public limited companies, partnerships, Hindu Undivided Family or sole partnership) or joint application (two applicants). The salary of the applicant should be at least Rs2 lakh per annum in most banks and financial institutes to avail a car loan. A three-digit number that summarises the loan repayment capacity of an applicant is a CIBIL score. The score generally varies from 300 to 900 and one above 700 is mandatory for a car loan. A credit score is extremely important to take out most loans and the loan repayment influences the score’s value. Therefore, maintaining a high score is a necessity.

Car loan documents required and features -

To prove the eligibility criteria, banks and NBFCs demand certain documents that validate them. ID proof and address proof (PAN card, Voter ID, Aadhar card, driving license, passport or any other government-authorized document is accepted), income proof (ITR, salary slips, form 16 or business profit proof), bank account statement (past 3 to 6 months bank balance statement) and credit report. Unlike unsecured loans that have pre-decided loan amounts, the principal amount of a secured loan depends on the collateral’s value, the bank and NBFCs grant up to 90% of the car’s on-road price as the loan amount. The tenure or the loan term of a car loan is a minimum of 1 year and a maximum of 7 years. The interest rate of a car loan varies according to the loan amount and tenure opted. And it starts from 9% per annum. A Car Loan EMI Calculator can be used to know about the interest rates and loan details of a car loan from the online platform of the lenders.