Home Car Loan How To Get Best Car Loan | 1st day loan process

How To Get Best Car Loan | 1st day loan process

by Expert
How to get best car loan

You probably make good research for buying a car for you and your family. Today a car is no longer considered as luxurious commodity. But it is necessity to have a car because, lifestyle is changing so rapidly. Today most people travel from one location to another in a city. If you have your personal car then it would be good for your development also. Car loan can help you in this regard. It is no longer tuff to avail a car loan today. But right loan offer will make your car ownership journey smoother. Here we will discuss about how to get best car loan easily?

You may not have lump-sum payment in your hand but, there are numerous lenders who can help you to get your dream of buying a car through an easy car loan. 

Car loan application is now hassle-free, easy, and complete online. You need to find a good site which is most reliable and pocked friendly. On the site simple fill your details and that’s all for Appling a car loan instantly. Here you will get all necessary information about car loan interest rate, EMI information, required documents for applying your car loan.

What are eligibilities and criteria to get best car loan?

Get best car loan

Today almost all bank and NBFC organizations offer car loan. All financial organization process almost same criteria before car loan approval. Please check below certain eligibility you should met to get a car loan for buy a car are:

  • Loan Applicant age– 21-60 years(for employee) and 18-65(for self-employed)
  • Applicant Net Monthly Income- 20000
  • Applicant Job- Minimum 1 year with current employer.
  • Income Source- Salaried or self-employed, working for government or in a private company
  • Credit score- 700
  • Loan Tenure- Up to 7 years
  • Loan to value ration- 100%

What are the Benefits of Car Loan?

In how to get best car loan check key points of taking a car loan.

  • You can get finance for new or used cars.
  • Most bank offer up to 85% to 90% finance of on-road price of a car. You can check there are some bank offering up to 100% financing on car’s on-road price.
  • You can get up to 7 years to repay the car loan amount to the Leander. You can chose loan repayment time from 1 year to 7 years.
  • You can take benefit of loan amount which is three times of your annual income.
  • Always try to take car loan from your dealer point and Leander must have direct tie-up with car manufacturer. You will get additional discount.
  • You can also get same day financing.
  • Take a look of car loan repayment structure. Always go for reducing loan terms.
  • Mind it, purchased car through financing will be held as collateral until the loan is repaid.

Documents required for Car Loan

All financial organization process almost same rules and regulation for providing a car loan. You need to submit Documents as per Leander requirement. Below are the most widely used documents to obtain a car loan.

Identity proof for KYC purpose (any of the following)

  • Aadhaar Card
  • Passport
  • Driving license
  • Voters ID card
  • PAN card

Address proof (any of the following)

  • Aadhaar Card
  • Passport
  • Driving license
  • Ration card
  • Utility bills

Applicant income Proof

  • Form 16
  • Salary slips if you are salaried
  • Latest Income Tax Returns
  • Last 6 months Bank statements

Compare Car Loan Interest Rates in India 2021

Before applying for a car loan or taking a car on finance take a look on latest car loan interest rate chart. You can get benefit with this car loan chart. You can decide best car loan that suit your budget.

Bank NameCar Loan Interest RatesProcessing Fee
State Bank of India Car Loan7.70% p.a. onwardsRs.1,000 plus GST onwards
Indian Overseas Bank Car Loan7.25% p.a. onwardsContact the bank
Bank of Baroda Car Loan7.25% p.a. onwards0.50% of loan amount, maximum Rs.10,000 plus GST
South Indian Bank Car Loan7.55% p.a. onwardsContact the bank
Canara Bank Car Loan7.30% p.a. onwards0.25% of the loan amount, minimum Rs.1,000 and maximum of Rs.5,000
HDFC Bank Car Loan7.50% p.a. onwardsContact the bank
Axis Bank Car Loan8.65% p.a. onwardsMinimum of Rs.3,500 and maximum of Rs.5,500
Federal Bank Car Loan8.50% p.a. onwardsContact the bank
Karur Vysya Bank Car Loan7.55% p.a. onwardsContact the bank
ICICI Bank Car Loan7.90% p.a. onwards0.5% of the loan amount
Jammu Kashmir Bank Car Loan7.30% p.a. onwardsContact the bank
Yes Bank Car Loan7.95% p.a. onwards Contact the bank
Central Bank of India Car LoanRepo Rate + 4.80% onwardsContact the bank
IDBI Bank Car Loan7.90% p.a. onwardsContact the bank
Karnataka Bank Car Loan8.20% p.a. onwardsContact the bank
Lakshmi Vilas Bank Car LoanRLLR + 0.75% onwardsContact the bank
Union Bank of India Car LoanMCLR + 0.35% onwardsContact the bank
Federal Bank of India Car Loan8.25% p.a. onwardsContact the bank

How to Calculate a Car Loan EMI?

You have to pay the EMI (Equated Monthly Installments) against your car loan to the Leander. If you borrow higher loan then your EMI will also be higher. Similarly, for short period loan will meet higher EMI. Key factors are:

  • The amount of the loan
  • The interest rate that is applicable to the loan
  • The tenure of the loan
  • The processing fees of loan

Car Loan calculation example-
 Suppose you have taken Rs. 200000 loan at an interest rate of 12% to purchase a car, now you decided to repay the amount on next 12 month. Below will be your month wise EMI chart.

You can calculate the Car Loan EMI Amount with the help of the

Mathematical formula: EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1]

Where P(Principal Amount), R (Rate of Interest) , and N (number of years) are the variables. This also means that the EMI value will change, each time you change any of the three variables.

Monthly calculated Car Loan for Repayment

Payment No.Begining BalanceEMIPrincipalInterestEnding Balance
1Rs. 2,00,000Rs.17,770Rs.15,770Rs.2,000Rs.1,84,230
2Rs.1,84,230Rs.17,770Rs.15,927Rs.1,842Rs.1,68,303
3Rs.1,68,303Rs.17,770Rs.16,087Rs.1,683Rs.1,52,216
4Rs.1,52,216Rs.17,770Rs.16,248Rs.1,522Rs.1,35,968
5Rs.1,35,968Rs.17,770Rs.16,410Rs.1,360Rs.1,19,558
6Rs.1,19,558Rs.17,770Rs.16,574Rs.1,196Rs.1,02,984
7Rs.1,02,984Rs.17,770Rs.16,740Rs.1,030Rs.86,244
8Rs.86,244Rs.17,770Rs.16,907Rs.862Rs.69,337
9Rs.69,337Rs.17,770Rs.17,076Rs.693Rs.52,261
10Rs.52,261Rs.17,770Rs.17,247Rs.523Rs.35,013
11Rs.35,013Rs.17,770Rs.17,420Rs.350Rs.17,594
12Rs.17,594Rs.17,770Rs.17,594Rs.176Rs.0

10 tips on how to get the best car loan

So, you are decided to purchase a car on loan. Consider following aspects to avail your loan quickly form bank or NBFC organization.

Check Your Credit Report- First check your credit score. Higher credit score means you are ready to get your fund quickly. A score of 750 or more is good. But if you are defaulter then your application may be rejected.

Maintain credit score- You are willing to take car loan to purchase a car. It is very Important to Pay Your Bills on Time you must have a minimum monthly pre-tax income and manageable debt-to-income ratio (DTI). Previous loan repayment history effects your next loan application.

Check Car Loan Options- Before taking any loan, a market research is mandatory. May be you find a better option to apply for a car loan. Check current interest rate oan compare first.

Minimize loan amount- Always try to pay large amount as down payment for purchase a car. It will impact on your EMI. Smaller loan amount will provide smaller EMI.

Always select a loan plan that fits you– It is about your budget. Always apply for a loan that suit your profile. If you already paying a loan then it is more important fact. Always chose a loan and EMI that you can easily repay to Leander.

Always read Terms of Loan– lower EMI means it is good for you is not right. Always go for a car loan that ensure low EMI with minimum loan tenure. Must read all terms and conditions carefuly/

Chose Complete Coverage car loan scheme– always go for complete coverage insurance plan. It will help recovery if any accident occurred.

Find right dealer and loan scheme– Always go for a bank to avail the loan. Good car dealer always guide you for better car loan scheme. Make some visit to dealer’s point to discuss with. Also compare bank loan scheme.

Which bank to choose for a car loan– Always approach a bank where you transact regularly. It will be very easy to get loan firster from a bank where you have good relationship. Many bank offer exciting scheme for existing customer. You may get same day car loan approval from your bank.

Check car loan eligibility– If you are willing to purchase a pre-owned car then make sure bank finance pre-owned car. If not then contact dealer point and they will guide you for best car loan provider for pre-owned car. 

If you need more car finance information: How to finance a car in India

How to Apply Car Loan?

There are several ways to apply for a car loan

  • Directly visit bank branch and contact loan manager.
  • Apply online from bank portal.
  • Get financing via car dealer.

Final word: bank will collect your documents and initiate the application processing, which includes SIBIL score checking, the value of the car you are willing to purchase, eligibility conditions, and more, and then take a decision on your loan application based on the evaluation results. If everything found positive that means you will get your car finance soon. If there is any problem then your car loan application will be rejected.

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