Gone are the days when owning a car or a two-wheeler was a luxury. Today it has become a necessity for all to own a vehicle of their own. Your first car; an expensive upgrade of an old model; a used car, a commercial vehicle or a two-wheeler, an auto loan brings everything within your reach.
What is an Auto Loan? What are its different types?
An Auto Loan is taken by borrowers to purchase a new or used private or commercial vehicle. Auto loans are secured loans where the vehicle itself is used as a collateral. It is offered by lenders for new cars, used cars, two wheelers (generally called a Two-wheeler Loan) and commercial vehicles (generally called a Commercial Vehicle Loan).
What does the borrowing/repayment look like?
Banks usually offer auto loan up to 90% of the cost for new vehicles and 85% for second hand vehicle. The vehicle is hypothecated to the lender, as collateral. The repayment is based on your monthly income and your ability to repay and the tenure is typically between 12-84 months.
What are the typical interest rates?
Lenders fix interest rates depending on the type of vehicle and loan amount. Interest rates are usually fixed for auto loans.
What do lenders look for before granting an auto loan?
Loan approval process for an auto loan is relatively easier when compared to home loan. However, a few basic criteria that lenders look for before approving your loan application are:
Click here and check your loan eligibility to take an informed decision before going for an auto loan.
Which are the documents required for applying for an auto loan?
The actual documentation required varies from one lender to the other. However the basic list of documents required by lenders are: Identity Proof, Address Proof, Salary and Bank Statement.
What other costs, fees or charges do I have to incur?
Apart from the actual vehicle cost, you need to check out associated costs like taxes, registration fees, insurance amount, processing fee, documentation charges and stamp duty etc. It is always advisable to check beforehand all the charges and fees while applying for the loan.
What to look out for?
It is not always necessary to go with the bank your vehicle dealer suggests, you can always go to another lender if they offer better loan terms. Therefore, always do a thorough research by comparing lenders and their rates before finalizing a lender.
Click here to Check, Compare and Apply for an Auto Loan.
|DOCUMENTS REQUIRED||PERSONAL LOAN||CREDIT CARD||AUTO LOAN||HOME LOAN|
|Latest Credit Score & CIR*|
|KYC docs (identity, signature & address proof)|
|Income Statement (such as salary slip)|
|Last 3 years IT return||
(for self-employed only)
(for self-employed only)
* This is an indicative list and may differ from lender to lender.
Loan Eligibility Calculator