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Andhra Bank Car Loan Eligibility

Andhra Bank is one of the leading medium-sized public sector banks in India with offerings across the financial spectrum such as a savings account, insurance, term deposits, mutual funds, corporate banking, loans and online services. Car loans are available with Andhra Bank at attractive interest rates. Any individual with a minimum gross income of Rs. 1 lac per annum is eligible to apply for the loan with Andhra Bank. The bank also offers special loan schemes for women customers. The repayment period of the car loan is a maximum of 84 months.

Andhra Bank Car Loan Eligibility Criteria

Andhra Bank Car Loan Eligibility

Banks have different criteria to grant a car loan to any individual or a firm. It is important to check the guidelines laid out by the bank before applying for a car loan to avoid any possible rejection.

  • Any individual having a minimum gross income of Rs. 1 lac is eligible to apply for the car loan.
  • Any existing corporate customers of the bank can apply for this loan.
  • The rate of interest on the car loan is
    • One Year MCLR + 0.70% - New Cars
    • One Year MCLR + 3.45% - Used Cars
  • The bank works out the financing amount on the basis of repayment capacity and the maximum permissible EMI will not be more than 60% of net salary for salaried individuals and 70% for the non-salaried category.
  • In case of used cars, the amount of financing will be 60% of the garage value or Rs. 25 Lacs whichever is lower.
  • Repayment period of the car loan is 84 months for new cars and 60 months for used cars.
  • The bank allows co-obligation of a third party to the loan.
  • The car that will be purchased is hypothecated to the bank.
  • The Andhra Bank car loan is available to limited companies, firms, societies and trusts holding account with the bank.
  • The maximum loan amount for corporate clients ranges between Rs. 25 lacs to Rs. 50 lacs.
  • The bank charges 1% of the loan amount with a minimum of Rs. 1000 and maximum of Rs. 25,000 towards processing of the loan documents.

The following documents are required by the bank along with the loan application for processing:

  • Duly filled application form
  • Valid driving license
  • Proforma invoice
  • Salary slip
  • IT returns
  • Assessment order
  • Documents required for KYC compliance

What are the factors impacting the eligibility of a car loan?

The eligibility for a car loan is influenced by a couple of factors. Some of the main factors have been highlighted below:

Credit score –  Your credit score is of great importance to the bank while processing a loan request. A credit score shows the health condition of your financial situation. Hence, it extends confidence to the bank on the repayment capacity and quicker turn around on the car loan application. If your credit score is low, it is advisable to take steps and turn it around to minimize the chances of loan rejection.

Age – Most banks maintain the minimum age eligibility to apply for a loan at 21 years. The loan repayment needs to be completed by 65 years. The banks tend to favour younger working applicants for a car loan as their earning capacity is longer than the older applicants.

Income level – A car loan application is quite dependent on the earning capacity of the applicant. A proof of your income is required to be submitted to the bank. In case, you are not able to satisfy the eligibility criteria of minimum income, one can add earning spouse to the application as a co-obligator and increase your eligibility for the car loan.

Debt –  Your current debt impacts the decision to offer a loan. The debt-income ratio in your financial condition is closely considered by the bank before approving the loan. There are doubts on the repayment capabilities if you are already burdened with debts and therefore, the bank may hesitate to add another one.

How to improve your eligibility for car loan?

If some factors of car loan eligibility are not in your favour, there are ways to improve your financial condition to get a car loan.

Repay existing debts –  The existing debts must be paid off before a loan application is submitted. This increases your chance to get a quicker approval. The bank takes your current liabilities into account while processing the loan application.

Bring in Co-applicants –  There is an option to add a co-applicant to the car loan application process. This can be an earning spouse, parents or siblings. When you add a co-applicant, you increase your eligibility for getting a car loan.

Increase your credit score – Improving your credit score is one of the most important steps in ensuring a successful loan application. Existing debts must be paid off to avoid chances of loan rejection. Credit card payments and history of debt payments must be done in an orderly fashion to instil confidence in the bank for a new loan.

FAQs: Andhra Bank Car Loan Eligibility

(1) What is the loan repayment tenure with Andhra Bank?

Andhra Bank offers a maximum loan repayment tenure of 84 months for new cars and 60 months on used cars.

(2) How can I improve my credit score?

Credit score shows the overall financial health of an applicant. In case, the applicant has quite a few current debts to pay off, the score will be on the lower side. It is possible to improve the credit score by paying off existing debts, making credit card payments on time and showing higher earning capacity to negotiate a good deal on the car loan.

(3) What are the documents required by Andhra Bank while submitting a car loan application?

The following documents are to be submitted for a car loan application:

  • Duly filled application form
  • Valid driving license
  • Proforma invoice
  • Salary slip
  • IT returns
  • Assessment order
  • Documents required for KYC compliance

(4) What is the minimum income requirement to apply for a car loan with Andhra Bank?

Andhra Bank requires a minimum income requirement of Rs. 1 lac per annum to be eligible for a car loan.

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