Car Loan

Car Loan – Eligibility, Documents Required, Benefits, Checklist | Compare Best Lowest Car Loan Interest Rates

Dreaming of your own car? Avail a Car Loan as it can be a perfect solution to fulfill your dreams. Make your dream of owning a car and drive around the city with your own vehicle. Get Instant Car Loan Funding from Popular Banks at Lowest Interest Rates. Go through the entire article to be aware of details like What is a Car Loan, Eligibility, Documents Needed for a Car Loan, Checklist to Follow while Opting for a Car Loan all under one roof.

Car Loan Interest Rates Overview

Car Loan Details
Interest Rate (Monthly reducing balance) 7.00% onwards
Processing Fees Depends on the bank
Loan Tenure 1 year to 8 years
Pre-closure Charges Varies with bank
Guarantor Requirement Varies with bank

Eligibility for Car Loans

Car Loan Eligibility is different for different Banks. However, we have outlined some of the common criteria that the majority of the banks look into. They are as follows

  • Individuals must be under the Age Group of 18- 75 years
  • Anyone who wishes to avail Car Loan should have a Net monthly income of Rs. 20,000
  • Must have at least 1 year of employment with the current employer.
  • Must be salaried or self-employed, working for a government establishment or a private company.

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Documents Needed for a Car Loan

Identity proof (any of the following)
  • Aadhaar
  • Driving License
  • Passport
  • PAN Card
  • Voters ID card
Address proof (any of the following)
  • Aadhaar
  • Ration Card
  • Driving Llicense
  • Passport
  • Utility Bills
Proof of income
  • Latest Income Tax Returns
  • Salary slips if you are salaried
  • Form 16
  • Bank statements going back 6 months

*Note: Make sure to cross-check with the lender what exactly they want as they may change from time to time.*

Features & Benefits of Car Loan

Have a quick glance at the Car Loan Benefits that you can get. They are as follows

  • Easy Loan Application Process
  • Minimal Documentation is Required
  • Quick and Easy Loan Procedures and Disbursement
  • Attractive Interest Rates
  • Diverse Loan Options Based on the Requirement
  • Varied Repayment Options

Benefits of Car Loan

Checklist to Follow While Applying for a Car Loan

Steps Requirement Inference
Apply for a car loan Compare all offers available To find the loan that offers you the highest loan amount and the most affordable interest rate
Submit Income Proof Bank Statement (last 6 months) Pay-Slips (last 3 months) IT- Returns (last 2 years) The lender wants to establish your ability to repay the loan
Submit Proof of Address and Identity PAN Card, Voter’s ID, Aadhaar Card, Passport, etc. The lender wants to establish your nationality, identity, and permanent address
Credit History PAN Card The lender wants to check your past credit records and establish if you can be trusted to make regular repayments
Information About Vehicle Sales Receipts from the showroom from where the vehicle was purchased The lender must confirm that the deal was affected as intended
Proof of Insurance and Driving License Copies of the vehicle’s Motor Insurance and your Driving License The lender must establish that all laws and protocols are followed with regard to the purchased vehicle.

How to Calculate Car Loan EMI?

Equated Monthly Installments (EMIs) you pay depends on several factors and they are as follows

  • Size of the loan
  • Tenure of the loan
  • Processing fees
  • Interest rate that is applicable to the loan

Higher is the loan amount the higher you need to pay as EMI. Similarly the shorter the loan tenure is higher the EMI will be.  In order to find the best comparison and an affordable EMI try Car Loan EMI Calculator.

How to get Car Loan Approval Faster?

If you want funds for your new car or used car you better choose a pre-approved loan. Check out the simple steps listed below to make your Car Loan Approval Process much faster. They are as follows

  • Check your credit report.
  • Pay Bills on Time
  • Look for Car Loan Options
  • Borrow as Less as Possible
  • Select a Plan that fits your Budget
  • Keep in mind the Terms of the Loan
  • Avail a Car Insurance with Complete Coverage

Key Points to Remember before Applying for a Car Loan

Below is the list of key points to be noted before considering a car loan. They are explained in detail so that you will have an idea of what to look for before applying for a car loan.

  • The most significant step is to choose the best lender. Pay attention to the best lender among the list of options you have and select the lender offering you enough loan amount at lower interest rates.
  • Check your credit score in advance as a decent credit score can help you bargain with the lender.
  • Don’t apply for an excess amount if you can’t afford to repay it in time.

Compare Best Lower Car Loan Interest Rates as of 11 Nov 2021

Bank Interest Rate Tenure
Bank Of Baroda 8.60% to 10.35% Max. 84 EMI
Punjab National Bank 8.70% to 9.15% Max. 84 EMI
Canara Bank 8.75% to 8.95% Max. 84 EMI
Central Bank Of India 8.80% to 8.90% Max. 84 EMI
Indian Overseas Bank 9.05% to 11.05% Max. 84 EMI
Dena Bank 9.05% to 11.15% Max. 84 EMI
United Bank Of India 9.05% to 9.85% Max. 84 EMI
Allahabad Bank 9.10% to 10.10% Max. 84 EMI
Andhra Bank 9.20% Max. 84 EMI
State Bank Of India 9.20% to 12.65% Max. 84 EMI
Bharatiya Mahila Bank Limited 9.20% to 12.65% Max. 84 EMI
State Bank Of Mysore 9.20% to 12.65% Max. 84 EMI
State Bank Of Hyderabad 9.20% to 12.65% Max. 84 EMI
State Bank Of Patiala 9.20% to 12.65% Max. 84 EMI
State Bank Of Travancore 9.20% to 12.65% Max. 84 EMI
State Bank Of Bikaner And Jaipur 9.20% to 12.65% Max. 84 EMI
Bank Of India 9.35% Max. 84 EMI
Syndicate Bank 9.40% Max. 84 EMI
Corporation Bank 9.40% to 11.10% Max. 84 EMI
Vijaya Bank 9.45% Max. 84 EMI
Bank Of Maharashtra 9.50% Max. 84 EMI
Jammu And Kashmir Bank Limited 9.70% Maximum 7 years
Karnataka Bank Limited 9.90% to 13.50% Max. 84 EMI
IDBI Bank 9.90% to 9.95% Max. 84 EMI
Axis Bank 9% – 11.50% Max. 84 EMI

* Note: All the Interest Rates mentioned for the Banks Listed are as of 11th Nov 2021. They may change with time keep in mind and cross-check before you apply for a car loan*

Dont’s While Applying for a Car Loan

Just like you do proper research and homework for buying your favorite car, you need to do enough research for opting for a car loan. Keep the below pointers in mind and avoid these mistakes while you opt for a car loan. They are along the lines

Availing 100% Car Financing: You shouldn’t take a car loan of 100% instead should provide a certain amount as a down payment. No down payment Amount can result in higher interest rates and in turn, you need to pay more EMIs in the future. Try to pay a significant down payment to maintain your car loan to a minimum.

Choosing Longer Tenure for Car Loan: Check beforehand how much loan amount you can pay comfortably. If you can pay more EMIs then select shorter tenure so that you can save on interest outgo at the maximum extent.

Not Comparing Interest Rates of Different Lenders: Never ever take a car loan before comparing the interest rates offered by different banks. A Little Difference can also make up for a huge difference in your savings for the future.

Not Checking Other Costs: Also, keep a track of the other costs such as Processing fees, Administration Charges, Pre-Payment Penalty so that you don’t end up landing in difficult times.

Best Car Loan Products You can Opt for in 2021

Key USP Bank Features
100% On-Road Financing ICICI Bank
  • Effective interest rate starting 7.90% onwards
  • Tenure is up to 84 months
  • The loan amount that can be availed will depend on the model, cost, customer profile, etc.
  • Pre-qualified and pre-approved customers can avail the offer
Loans for Luxury Cars HDFC
  • Effective interest rate is 7.95%
  • Tenure is up to 84 months
  • Maximum loan amount is up to Rs.3 crore
  • 100% financing of on-road price for select models
Small Loans Axis Bank
  • Effective interest rate starts from 7.45%
  • Tenure is up to 96 months
  • Up to 100% of the on-road price may be provided as a loan
  • You can avail a loan of Rs.1 lakh
Designed for professionals and agriculturalists with no Income Proof State Bank of India
  • Effective interest rate is 7.20% onwards
  • Tenure is up to 84 months
  • Up to 90% of the on-road price may be financed
  • Loan is provided for professionals and agriculturists
Free Personal Accident Insurance Federal Bank
  • Effective interest rates start from 8.50%
  • Tenure is up to 84 months
  • No income documents need to be provided
  • Up to 100% of the ex-showroom price can be availed
Low-Interest Rates for Used Cars and New Cars Canara Bank
  • Effective interest rate starts from 7.30%
  • Tenure is up to 84 months
  • Up to 90% of the on-road price may be provided
  • Lower interest rates are provided for women

FAQs on Car Loans

1. Does a Bank provide 100% Car Loan Funding?

The maximum amount that can you can take for a Car Loan varies from lender to lender. Most of the banks offer up to 90% car loan funding. However, banks like HDFC, ICICI offer 100% funding.

2. What are the Benefits of Car Loans?

  • Car Loans, in general, have lower interest rates
  • It is easy to take Car Loans Comparatively.
  • As it is a secured loan anyone with a mediocre credit score is eligible to take this loan.
  • The vehicle itself acts as a security against the loan.

3. What is the minimum credit score I need to get a car loan?

Banks offer Car Loans to individuals with a minimum credit score of 750. Certain Banks give Car Loans irrespective of the Low Credit Scores however charge high-interest rates.