How to apply for a car loan

Car loans would be a great financial help for those who may be unable to purchase a private vehicle due to paucity of funds. The process of Car loan application is a very simplified one after you decide the model and make of the car.

Online you can compare all the car loan offers given by various lenders such as banks, NBFCs, and FinTech's. Along with that, you should check the eligibility with each of the lenders. It will help you in choosing the right car loan.

The process to check Car Loan Eligibility with the help of the Calculator:

A car loan eligibility calculator is the best tool using which an individual gets an approximate idea of the amount he is eligible for loans. The calculator considers different factors for eligibility calculation, especially the financial health of a car loan applicant.

Using the eligibility calculator, the borrower can also know the lenders who can provide him the expected car loan amount under his eligibility conditions.

Steps and Procedures

The online application process of the car loan is paperless, faster, and hassle-free. When you apply for a car loan, you are required to follow the steps mentioned here:

Step 1

Log on to the website of the lender

Step 2

Post that, applicants are required to fill up an application form of their desired lender with all the vital such as their details and other required credentials.

Step 3

Post filling the application form, you need to submit the following documents either online or offline as per the mode you choose.

  • Income proof in the form of salary slips for the last three months or the latest bank statement for three months or income tax returns filed for the past three years. 
  • Submission of the Identity proofs such as PAN card, voter’s ID, driving license, passport, or Aadhaar Card. You can submit the same as your age proof too.
  • As your address proof, you can submit the electricity/ gas bills, voter’s ID, Aadhaar Card, Ration Card, or bill of Life Insurance.

Step 4

Post you submit the required documents at the time of filing a car loan application, now the lender will do the verification and based on that, decide whether to approve or reject your loan application.

The lender verifies the documents at its end and checks the applicant’s credit score to understand its creditworthiness. This verification process takes a few seconds.

Once the authenticity verification is completed, the validation of the given information begins. This usually involves the validation of the income proof, which determines the repayment capability of the loan applicant.

Step 5

After successfully completion of all the above steps, the lenders calculate the amount for which the car loan applicant is eligible, based on the type of the car and after analyzing his/her loan repayment ability. 

Please note that the lender only disburses a certain percentage of your car value. In case you are buying a new car then you are liable for 85% of the total value of the car. In case applying for a loan on a used car then offer a minimum 50% to 80% of at-present market value of the car.

Step 6

If the applicant is found to be eligible and agreed with the lender regarding the loan amount and its term and conditions, the lender approves the loan instantly. 

All you need to do is just make sure you are eligible for the loan before applying. With lucrative interest rates, easy documentation, quick disbursal, and flexible tenures, car loan applicants get complete peace of mind and the liberty to own a car of his or her choice.