Karnataka Bank Car Loan Eligibility

Karnataka Bank Car Loan Features

• The loan amount for a new car loan is calculated as maximum 85% of the on-road price of the vehicle This includes the cost of vehicle, Road Tax, motor insurance, and registration charges
• For a used car, a maximum loan amount of Rs. 20 Lakhs can be availed
• For new vehicle purchase, the maximum loan tenure can be 7 years and used vehicle can have a loan tenure of 34 months
• New car loan has a margin requirement of 15% of on-road price of the car
• Old or used car loan has a margin requirement of 25-30% of on-road price of the car
• Hypothecation of vehicle or a third-party guarantee has to be offered as a security to the bank for availing car loan facility

Karnataka Bank Car Loan Eligibility Criteria

Here is the list of eligibility criteria that have to be fulfilled to apply for a car loan with Karnataka Bank.

• Minimum age of borrower should be 18 years
• Applicants have to be income tax assesses
• Agriculturists who own properties can apply for a car loan
• Apart from salaried individuals and self-employed individuals, firms, companies, trusts, societies, and even associations can avail the benefits of a car loan from Karnataka Bank.
• The bank also offers car loans to NRIs.

Documentation Requirements for Karnataka Bank Car Loan

Applicants need to submit duly-filled as well as signed application form along with the below mentioned documents to avail car loan from Karnataka Bank.

• Photo ID proof can be either of PAN Card, Passport, Aadhaar Card, Voter ID, or Driving License
• Address Proof (Utility bills or Ration Card)
• Previous 2 years’ Income tax returns or Form 16
• Salaried employees have to furnish salary slips of the past 1 year
• Quotation stating price of vehicle – to be sourced from an authorized dealer

Application Process for Karnataka Bank Car Loan

Karnataka Bank offers a lot of convenience when it comes to loan application process. Applicant can visit the bank website and apply for a car loan online from the comfort of home or office. As a first step, the applicant needs to check his or her car loan eligibility before proceeding with the application. After ensuring that they meet the eligibility criteria set by the bank, applicants can click on the 'Apply Online' tab on the right-hand side of the official page. Applicants should submit a duly-filled car loan application form online. The necessary documents relating to age, identity, income, and address proof need to be uploaded online. It takes approximately 2-4 days for the bank to process applications and disburse the car loan.

Factors Impacting Eligibility of Karnataka Bank Car Loan

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

Income –  Applicants who have a steady source of income can easily qualify for a car loan from Karnataka Bank. Karnataka Bank mandates applicants to fall under the income tax bracket to further qualify for a car loan.

Credit Score – Before approving a car loan, the bank verifies an applicant’s credit score. Applicants who have higher credit score tend to have regular repayment patterns and also fewer liabilities. This is why they can easily get car loan approval from Karnataka Bank. Applicants who have had erratic payment patterns could be either rejected by the bank or have difficulty in getting a car loan approval.

Profession –  Karnataka Bank also focuses on an applicant’s profession to determine his or her eligibility for a car loan. The profession reflects an individual’s capability to have a steady income and thereby a repayment capacity.

Ways to Improve Eligibility for Car Loan?

An applicant can take appropriate measures to improve eligibility for a car loan. This way, he or she can have better chances of getting a car loan easily. Here are some of the tips that can be followed.

Enhanced Loan Tenure – Choosing a longer loan tenure is the most popular method to increase car loan eligibility. Longer loan term results in lower monthly instalments without any change in interest rate and principal loan amount. Borrowers can easily meet lower monthly instalment requirements and this helps in increasing their credit standing and thereby loan eligibility.

Improve Credit Score – A poor credit history or any outstanding loans could affect car loan eligibility. Borrowers can improve their credit score by ensuring credit card bill payments are made on time and debts are significantly reduced.

Combining Incomes – The car loan eligibility can be improved by combining incomes of family members including spouses, parents, or children. This can be especially helpful while applying for a larger amount loan. Banks focus on the borrower’s ability to repay loans and this can be improved by displaying more income on a regular basis.

Step-up loan – In a step-up loan, a borrower has to pay lower monthly instalments in the initial years and in the second half of the loan term the payments increase. Generally, banks and other car financing companies focus on the initial years’ lower EMIs to calculate the eligibility for loan.

Perks – Borrowers should try and compute their variable income such as performance incentives, bonuses, etc. These variable earnings can be added to the regular income to project an overall higher income. This can help in significantly enhancing individual loan eligibility.

FAQs: Karnataka Bank Car Loan Eligibility

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

The maximum tenure offered by Karnataka Bank for car loans is 7 years for salaried as well as self-employed professionals.

(2) Do I need to provide any security to avail a car loan from Karnataka Bank?

No. The car loan offered by Karnataka Bank is a secured loan and the car purchased by you with the help of such a loan acts as a collateral.

(3) Which type of cars can I buy with this Karnataka Bank car loan?

Karnataka Bank offers car loans for any kind of passenger cars, multi-utility vehicles and sports-utility vehicles that are offered in India and are bought purely for personal use.

(4) Are there any prepayment charges on Karnataka Bank car loan?

The bank does not charge any prepayment charges on car loans.

(5) How does the bank decide my loan eligibility amount?

Karnataka Bank determines your car loan eligibility mainly basis your income and repayment capacity. Other important factors that are considered include your age, number of dependents, qualification, your family’s income (if any), savings history, assets & liabilities, and the stability & continuity of occupation.