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Buying your dream car is a click away!

Planning to buy a car?

Is yes, then this article will help you to understand the different 2 main types of car loans available in the market, the eligibility criteria and documentation required to avail the loan.

Types of Car Loans

Car loans can be mainly classified into 2 types: 1) New Car Loan and 2) Pre-Owned Car Loan.

New Car Loan – All eligible customers can avail for a new car loan when purchasing his set of new wheels. The car loans could range from a minimum of Rs.100,000 to max 80% value of the car or even 100% depending on the bank or finance company.

One can find out if you are eligible for a New Car Loan and the maximum limit using the Car Loan Emi Calculator which most banks and finance companies offer on their company website.

The eligibility for a New Car Loan/ Pre-owned Car Loan depends on the type individual if he or she is a Salaried, Self-employed, Salary customers etc.

Below are the details for each individual type.

Salaried individuals who are eligible for a New Car Loan/ Pre-owned Car Loan

Self-employed individuals who are eligible for a New Car Loan/ Pre-owned Car Loan

Self-employed non-individuals who are eligible for a New Car Loan/ Pre-owned Car Loan

Priority / Wealth customers eligible for a New Car Loan

Salary customers eligible for a New Car Loan

The documents required for availing the car loan

Additional documents required in case of Pre-Owned car loan

Tips & Tricks – How to manage your car Loan

Ensure you set out a budget. Make sure your car loan EMI is not more than 15% of your monthly net income. Keep money for your daily and necessary expenditure, keeping some money aside for unforeseen emergencies.

Pay a higher down payment. Paying a higher initial amount helps to reduce debt long term and saving money by paying lower EMI’s and interest.

Choose a Shorter Tenure. Select a lower tenure may be 3-5 years as over 7 years. This may mean a higher EMI, but also lower rate of interest.

Never miss an EMI. Disciplined payment of the EMI helps to avoid any late charges and also facilitates a healthy credit score.

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