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A complete guide to car loans

guide to car loans

Acquiring a car, we hit your first or the first it is a joyful occasion. However, the hassle associated with getting an approved car loan makes the process excruciatingly painful and long. A simple solution to this conundrum is to learn as much as you can about the process of a car loan. 

Let us start with the basics. 

You need to be eligible in order to apply for a car loan and the eligibility criteria are as follows: 

  • The candidate applying for the car loan must reside in India 
  • The person should be of legal age, I.e., above the age of 18 and below the age of 75. 
  • Their minimum monthly income should be above Rs. 10,000 
  • The candidate should have a verified work experience of a minimum of two or three years as a self-employed businessman, freelance consultant, etc. 
  • If the candidate is not self-employed, they must at least be salaried employees with proof of income. 
  • The candidate must demonstrate stable residential financial condition. 

If you meet the criteria mentioned above, you’re partly on your way to acquiring an approved car loan. The second part of the process starts with supplying the documentation. 

Here is a list of the documents that you will be required to submit when applying for a car loan: 

  • Identity proofs 
  • Proof of age 
  • A current address proof 
  • A valid proof of income 
  • Passport-sized photographs that were taken recently 
  • Verified sample of your signature.

Once you are ready with the documents, you list the tips below to make an informed decision about what kind of car loan would work best for you: 

  • Take a hard look at your finances and identify an approximate budget. Since car loans are paid on simple interest, you need to allocate the required amounts of funds to pay the interest every month. 
  • Use a loan calculator online and compare the offerings of different companies that offer car loans. 
  • Make sure to get your approval for a car loan before you go shopping for cars 
  • Compare the specifics of car manufacturers and automobiles identify the cars that are best suited to your budget as well as your vehicular needs. 
  • Do little research to find any ongoing offers or discounts that you can avail. After all, a car is a liability, therefore, if you can get it for cheaper that is just money in your pocket. 
  • Check out local vendors, showrooms, and online forums to have your automobile purchases verified and hassle-free. 

In order for your car loan application to be approved, you need to go through the following steps: 

  • Begin by checking out your credit scores as banks are going to use them but the mind whether you are a worthy candidate. 
  • Choose the banks and lenders who provide the maximum value and fill out loan application forms. 
  • The lending institutions will take some time to verify your documents and loan application thoroughly. 

Based on the easement document verification, lenders could take one to five days to approve the loan for payout. 

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