Are you planning to buy a new car this year and excited to park your dream car in your home? However, owning a new car will create a big hole in your pocket. Paying such a huge amount of cash may disturb your monthly budget. Instead of paying the full amount, you can avail a new car loan and your car will act as a mortgage.
During the loan repayment period, you can use your car and so, a new car loan is a safe and certain way of owning your dream car.
5 Must Know Facts Before You Apply For New Car Loan
Before you choose any banks or financial institution for a car loan, you can verify with the respective banks for latest and updated interest rate. Interest rate keeps changing and so always check before you apply.
Read Also: Top 7 Banks For Home Loan In India
New Car Loan Facts and Features
You can avail a car loan whether it is new or used one. If you wish to opt for a used car, then also you can apply for a used car loan as well. You need to repay the car loan amount within 1 to 7 years through EMIs.
That means you need to pay a fixed amount monthly for the tenure of the loan amount. It lets you plan your other usual expenses without disturbing your budget.
Generally, you need to pay a fixed rate of interest on your new car loan amount in India. Getting a car loan is very easy and requires fewer documents than any other loan.
Most of the banks finance 100% on your car or vehicle’s on-road price. However, I suggest you pay 20-25% as down payment and take car loan of 80% or less.
Top Banks Where You Can Apply For Car Loan
Most of the Banks and financial institution in India offers you to avail car loan at a very competitive interest rate. Before you apply for a car loan, it is better to compare that helps you to get the best available options.
You can cross check the features and benefits of top banks. However, there are 100s of banks and NBFCs that lets you apply for any loan.
I have done new car loan comparison in India so that you can take a decision based on those facts.
|Banks & NBFCs||Interest Rates||EMI per Rs 1 lakh||Processing fee|
|Bank of Baroda||8.60% – 10.35%||Rs.2056 – 2142||0.50% of Loan amount|
|Bank of Maharashtra||8.75% – 9.25%||Rs.2064 – 2088||0.25% of the Loan Amount (Min.: Rs.500/-)|
|Canara Bank||8.70% – 8.95%||Rs.2061- 2073||0.25% of the loan amount with a minimum of Rs.1000/- and maximum of Rs.5000/-|
|Central Bank of India||8.80%||Rs.2066||0.50% of loan amount with Minimum Rs. 2000/- and Maximum up to Rs 20,000/-|
|Corporation Bank||9.40% – 9.90%||Rs.2095 – 2120||1% of the loan amount subject to minimum Rs.1000/‐|
|HDFC Bank||9.25% – 11.25%||Rs.2088 – 2187||0.4% of Loan Amount or Rs.10000, whichever is lower|
|ICICI Bank Ltd||9.35% – 14.74%||Rs.2093 – 2365||Rs.2500/- to Rs.5000/-|
|IDBI Bank Ltd||9.90%||Rs.2120||N.A|
|Union Bank of India||8.90%||Rs.2071||N.A|
|Oriental Bank of Commerce||8.35% – 9.10%||Rs. 2044 – 2081||0.50%, min. Rs 500/- & max. Rs 7000/- plus ST.|
|Punjab National Bank||8.65% – 9.15%||Rs.2059 – 2083||Rs 100/- + service tax|
|State Bank of India||9.20% – 9.25%||Rs.2086 – 2088||0.50% of Loan Amount +ST|
|Uco Bank||9.00%||Rs.2076||1% of the loan amount maximum Rs.1500/-|
|Bank of India||9.25%||Rs.2088||Rs. 500/- Plus S.T.|
|United Bank of India||9.00% – 9.05%||Rs.2076 – 2078||0.50% of the loan amount sanctioned subject to a minimum of Rs.500/- and maximum of Rs.10,000/-|
|Dena Bank||9.00% – 9.10%||Rs.2076 – 2018||Rs 500/- irrespective of a loan amount.|
|Indian Overseas Bank||9.05%||Rs.2078||N.A|
Eligibility To Apply For Car Loan
To avail a car loan, you need to be eligible for that. However, the eligibility criteria are different for different banks and NBFCs. Some of the eligibility criteria are similar and you must attain a minimum age of 18 years.
If you are a salaried person, the minimum monthly salary must be Rs. 10,000. You also need to provide stability on your employment type whether you are a salaried or self-employed and minimum experience and years in the current profession.
Documents Requirement For Car Loan
You need to provide essential documents like identity proof, address proof, and income proof. Keep yourself following documents before you apply for a new car loan.
Filled up completely the car loan application form with essential and required information along with color passport size photographs.
You need to provide any one of the identity proof like Passport, Pan Card, Driving License, Voter ID Card, Aadhar Card, or any government issued ID card.
Furthermore, you also need to provide address proof like Bank Passbook or statement, Electricity or Water Bill, Ration card, Driving License, Passport, or Rent Agreement.
Apart from the above documents, you also have to furnish your income proof. Keep a set of following documents up to date for faster processing of your car loan application.
Last three month’s salary slips or six months statement of salary account if you are a salaried person.
Latest income tax return acknowledgment slips along with profit and loss statement. You also need to furnish Balance sheet certified by a CA in case you are self-employed.
Car Loan EMI calculation
EMIs make your life easy going and so calculate EMI on loan amount before you apply for a loan. It lets you know the monthly repayment amount that you need to pay based on the loan amount, period, and interest rate.
Most of the banks and financial institution provide you 80-90 % of the on-road price of a car loan. However, some of the banks cover almost 100% and so check with your nearest bank branch.
Published on: Jan 23, 2018