Tips to Keep in Mind Before You Avail an Auto Loan

Nowadays, getting a car loan is extremely simple. It is always better to gather all the information beforehand, so you have a clearer picture of what is in store for you. Taking a loan saves you from the burden of spending all your money upfront. It gets divided into regular payments of a certain amount till you pay off the entire borrowed amount.

Let us look at some normal eligibility criteria:

  • The minimum age of the applicant should be 18(salaried) and 21 years(Self Employed)
  • At the time of maturity, the age of the salaried applicant should be 60 years and 70 in case of Self Employed
  • Salaried Employees should have worked with the current company for more than one year
  • Self Employed applicants should have been in business for at least 2 years
  • The minimum amount of loan provided should be at least One Lakh

Documentation required before you apply for car finance

All banks and financial institutions offer different interest rates for car loans. You need to submit the below mentioned documents to avail car loan (documents will differ from bank to bank and different financial institutions)

Salaried Individual:

  1. Address Proof: This can include house lease/ leave and license agreement, ration card, driving license, housing society bill, voter card, or wireless landline bill.
  2. Identity Proof: Passport, PAN card, voter identity, or driving license.
  3. Income Proof: Latest salary slips with the Form 16 documents.

Self Employed

  1. Address Proof: The documents produced towards identity proof which reflects the current address of the concern/firm.
  2. Identity Proof: Passport, PAN card, voter’s identity card, driving license, latest, or sale tax registration certificate
  3. Income proof: Latest income tax return

Partnership Firms:

  1. Address Proof: The documents produced towards identity proof which reflects the current address of the concern/firm.
  2. Identity Proof: Partnership deed, shop & establishment act certificate, latest sales tax assessment order, or sale tax registration certificate.
  3. Income Proof: Audited balance sheet, profit & loss account (latest two years), and latest IT returns of latest 2 years.

Private Limited Companies:

  1. Address Proof: The documents produced towards identity proof which reflects the current address of the concern/firm.
  2. Identity Proof: Memorandum and Articles of Association (with registration certificate)
  3. Income Proof: Audited balance sheet, profit & loss account (latest two years), and latest IT returns of latest 2 years.