What are the requirements to get an auto loan?
Buying a car and getting a car loan to help make the purchase, can be the first significant financial commitment that many people make. Buying your own vehicle can give you an exhilarating sense of freedom but is also accompanied by some natural concerns—how to find the best auto loan suited to your credit needs, with the lowest interest rates.
With a plethora of financing options available in the market to choose from, it is now easier than ever before to buy a new car. Use the competition to your advantage and find the best auto loan deal. Read on to know the requirements to get an auto loan in India.
Things to Look for While Choosing the Best Auto Loan in India
Interest rate: One of the most important things to look out for when shopping around for an auto loan is the interest rate. Even a 0.05% reduction in the interest rate could mean savings by a couple of thousands of rupees at the end of the loan tenure. Of course, the interest rate also depends on your credit score and other factors, but is advisable to shop around first.
Fees: Also, you be sure of the kinds of fees and processing charges involved, as that might put a considerable dent in your pocket. Compare the features with the benefits to determine which car loan offer best fits your credit requirements.
Financing offered: Some banks offer 100% financing for select car models so explore the various loan offers even while you are exploring your purchasing options.
Credit report: While you are shopping around for the best loan offer, it is vital to obtain a copy of your credit report well before applying in order to check your credit score and any inconsistencies that might be in your report. Typically, banks and lenders look for a score of 750 or above to sanction a loan—with good interest rates. If your score is below 750, you need to concentrate on improving your credit score to at least 750. A higher score also means that you can avail of more attractive terms that will lighten your EMI burden.
Eligibility for Auto Loans:
The bare essentials in order to be eligible and avail an auto loan with the best interest rate are having a good credit score, and meeting the age, income and employment criteria. You need to demonstrate a regular income and stable employment history. Most lenders require a minimum salary requirement of INR 3 lakhs per annum in order to avail an auto loan - although this can vary with the bank/lender. If you do a little homework before you apply for an auto loan, you can look forward to a smooth ride in your new vehicle!