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Indian Bank Car Loan Eligibility

Indian Bank’s car loan is designed to offer car buyers the freedom of choice in cars and extends financial assistance depending on the car chosen. It has some attractive features such as flexible loan amount, flexibility in loan tenure, lower interest rates, etc. It also eliminates any form of pre-payment charges thereby allowing consumers to close the loan as per their financial convenience.

Indian Bank Car Loan Eligibility Criteria

Indian Bank Car Loan Eligibility

To avail Indian Bank car loan facility, an applicant has to meet a certain set of criteria for eligibility. These criteria are set by the Indian Bank basis age, employment type, source of income, on-road price of car, credit score, etc. Here are some of the eligibility criteria that are set out by the Indian Bank specifically for car loan facility.

  • Nationality Criteria: An applicant can qualify for getting car loan only if he or she is an Indian resident or should possess necessary documents to substantiate NRI status.
  • Age: The age bracket of applicant should be within 21-65 years.
  • Income: An applicant’s regular gross monthly income should be a minimum of Rs. 20,000.
  • Salaried Employees: Applicants who are salaried employees can get car loan which is 20 times the value of their gross monthly salary. The gross income could also include spouse’s income. The final take home pay after adjustment of EMI must be at least 40% of gross pay.
  • Self-employed: Businessmen or professionals can get car loan which is equal to 20 months of income. Loan amount is calculated depending on the individual’s repayment capacity and average income over the previous 2 years.
  • Employment Type: Indian Bank offers car loans to individuals who are in below mentioned categories of employment.
    • Non-salaried group – self-employed, businessmen, established professionals
    • Salaried group – employee who has completed at least 6 months of service in the job
    • Agriculturists and farmers
    • Corporate and non-corporate business enterprises
    • NRIs

Documentation Requirements for Indian Bank Car Loan

A car loan borrower has to submit the following set of documents at the time of applying for a car loan.

  • Application form duly filled-in attached with a passport sized photo
  • Identity Proof can be one of – Voter’s ID, Driving License, Passport or Aadhaar
  • Residence Proof can be one of – Voter’s ID, Driving License, Passport, Telephone Bill, Electricity Bill, Registered Lease Deed or Sale Agreement/Bank Statement
  • Proof of business address – applicable for businessmen or industrialists
  • Salary certificate
  • Proof of employment
  • Proof of other sources of income, if applicable
  • Balance sheet for the previous three financial years, applicable to businesses
  • Income tax returns of previous three years
  • Driving License
  • Quotation from authorised dealer for vehicle in question

Application Process for Indian Bank Car Loan

An applicant can directly contact the bank or opt for the online application process to seek car loan from Indian Bank. Online application process usually results in competitive interest rates, reduced processing fees, and also many other special offers such as cash backs. Once the applicant approaches the bank, relevant documents are collected and loan process is initiated. This includes checking of credit score, value of the vehicle, technical as well as legal verifications of the vehicle, eligibility calculations, etc. Based on the result of evaluation, the bank will either approve the loan or otherwise.

Factors Impacting Eligibility of Indian Bank Car Loan

Some of the key factors that tend to influence the eligibility of a car loan include:

Repayment History –  This is an important factor while considering the eligibility of an applicant for a car loan. When an applicant avails a loan, the expectation is that there will be timely EMI payments. For applicants who have a tendency of repaying loans on time, there is generally a good credit score to be found. Any default in payments directly affects the credit score.

Credit Use –  The amount of credit utilized by an applicant out of the total available credit limit is a key determinant in eligibility for a car loan. If an applicant uses the majority of the available credit limit, his credit score is affected because the ratio of credit utilization increases.

Debt Tenure – The time period for which an applicant has been availing credit from the market also impacts the overall credit score and thereby the eligibility for a car loan. Loans that have continued for a longer duration or higher frequency of loans can severely affect credit score.

Credit Mix –  The nature of credit in an applicant’s credit portfolio determines his credit score. Unsecured loans such as personal loans or credit card loan, are considered bad for overall credit score as compared to secured loans such as car or home loan. Hence, when the applicant opts for a secure loan such as car loan, his credit score is bound to increase.

Ways to Improve Eligibility for Car Loan

Here are some important tips on improving car loan eligibility of an applicant.

Pre-Approved Car Loans: Lenders such as Indian Bank offers car loans with minimal paperwork, instant loan approval as well as disbursal. If the applicant is an existing customer of the bank, he can get a pre-approved car loan. Also, for existing customers, there is generally no delay in getting a car loan disbursed because of partially existing paperwork.

Low Debt to Income Ratio –  It can help to maintain a low debt to equity ratio by ensuring that loan EMI payments do not exceed 50% of the total income. This ratio is evaluated while assessing an applicant’s repayment capacity and directly impacts eligibility.

Improve Credit Score –  Car loan eligibility is majorly dependent on an applicant’s credit score. For improving the credit score, it is important to maintain a good balance between secured and unsecured loans. Making EMI and credit card bill payments on time can help in improving the credit score.

Suitable Loan Tenure –  A shorter loan tenure requires higher EMI payments and has lower interest payments as compared to long loan tenure. Car loan approval chances are higher in cases of shorter loan tenures.

Co-Applicant – An applicant can opt for a co-applicant who has a good credit score and also has a steady source of income. It helps in serving as a guarantee for loan repayment. This further improves eligibility for car loan.

FAQs: Indian Bank Car Loan Eligibility

(1) What is the maximum loan tenure that is offered by Indian Bank for car loans?

The maximum tenure offered by Indian Bank for car loans is 7 years for new vehicles and 5 years for old vehicles.

(2) Are there specific cars which are financed by the Indian Bank car loan?

There is no specific guidelines around the make and model of car that is financed by Indian Bank car loan. All cars that are manufactured and sold in India are eligible for this loan.

(3) Does this loan require any collateral?

For car loans up to Rs. 10 Lakhs, there is no collateral requirement from the bank. In such cases, only the hypothecation of the vehicle to the bank is required. For loan amounts beyond Rs. 10 Lakhs, collateral equal to the excess amount is required to be given.

(4) How will Indian Bank know my credit history?

Indian Bank will be able to access your credit history since all the data pertaining to an individual’s credit score is available here. Every financial institution considers the credit score before approving any form of loan so as to identify the repayment capacity of the applicant.

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