Buying your own vehicle has moved from being a luxury to a necessity for many of us. Hence there is no dearth of car loans on offer from various banks across the country. In such a situation, it has become increasingly important to choose a car loan that fits your budget and offers you the best possible benefits. Following are some things to keep in mind when applying for a car loan.
1. Set a Realistic Budget and Research Your Options
The first priority is to set a realistic budget for your car based on your requirement as well as income level. Once you have settled on a budget, make sure to do in-depth research regarding all available cars in your chosen price segment and choose one of those instead of increasing your budget to get your dream car. It also does not hurt to check the track record of the car and the market response to ensure you are buying a car that you will be able to use for a while.
2. Check your Eligibility
Your car loan application is judged on the basis of several factors, such as income level and credit history. Make sure to get your credit report for free by filling out the form on Paisabazaar so that you can get a fair idea regarding your eligibility. If you request a check of your own score, it counts as a soft check and does not cause an adversely effect, however, in case your loan application gets rejected after a check is performed by the prospective lender (also called a hard check), it will adversely affect your score. A lower score makes it more difficult to secure a loan in the future.
3. Compare All Available Options then Choose
There is no way to know about the best deals unless you do an in depth study into available options. Use an online aggregator such as Paisabazaar to check various car loans on offer from leading providers and use the online EMI calculator to choose the offer that best fits your requirement and your budget. Taking the time to compare available options would help you get the maximum benefits as well as ensure you make an informed decision.
4. Ensure Availability of all Relevant Documents are Available
As with any other type of loan, banks require a range of documents for verification as well as documentation purposes. Some of the key documents required when applying for a car loan if you are salaried person are as follows:
- Government issued photo ID such as Driving License and PAN card,
- Address proof documents such as electricity bill, water bill and electricity bill
- Salary slips for the last three months and salary account bank statement for the last 6 months
- Latest Form 16 and more
In case you are self employed, the identity proof and KYC documents remain the same the main difference is with regards to the income proof documents. For self employed, income proof documents include:
- Business ownership and stability proof
- CA-certified Profit and Loss statement, income computation and balance sheet for previous 2 years
- Bank statement for previous six months
- Copies of last 2 years’ acknowledged IT returns and sales receipts as proof of turover
These are some of the key documentation requirements and for information regarding additional requirements log on to Paisabazaar. Failure to submit any of these documents can result in processing delays or even rejection of your car loan application.