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Car Loan Tips in India

Getting a car loan today is easy. Get all the info on the scenario beforehand, so you know what is in store for you. Taking a loan means, you can buy a vehicle without spending all your money upfront; but it ties you down to regular payments until you pay off the borrowed amount. The most popular option is the Hire Purchase System, whereby EMI's are adjusted towards repayment of the principal amount and the accrued interest.

Normal Eligibility Criteria:

  • Minimum age of applicant: 18 years (Salaried) and 21 years (Self Employed).
  • Maximum age of applicant at Loan Maturity: 60 years (Salaried) and 70 years (Self Employed).
  • For Salaried Employees: Should have worked for one year in the current company.
  • For Self Employed: Should have been at least 2 years in the business.
  • Minimum Loan Amount generally given is Rupees One Lakh.

Documentation Required for Car Loans:

All Banks and Financial Institutions offer varying interest rates for car loans. You need to submit the following minimum documents for approval of your car loan (documents may vary with the bank/financial institution to whom you apply):

For Salaried Individual:

Address Proof(any of the following documents):
House Lease/ Leave & License agreement, Ration card, Driving license, House Tax chalan, Housing Society bill, Voter card, Passport, Telephone bill, Electricity bill, Water Tax chalan, Wireless Landline bill, Credit Card Statement, Post Paid Mobile bills (2 bills required one bill of the last completed month and one which is 6 months before the last completed month).
Identity Proof(any of the following documents):
Passport, Photo Credit Card, PAN Card, Voter Identity card, Driving license, Employee ID issued by Government of India/ PSU/ Limited companies, Local Panchayat Identity card, Notary certification with Photograph. Form 16 with latest Salary slips.
Income Proof:(any of the following documents):
Latest salary slips with the Form 16 document.

For Self Employed:

Address Proof
The documents collected towards identity proof to reflect the current address of the concern/firm
Identity Proof(any of the following documents):
Passport, PAN Card, Voters Identity card, Driving license, Latest Sales Tax assessment order, Sale Tax registration certificate
Income Proof:(any of the following documents):
Latest Income Tax Return.

For Partnership Firms:

Address Proof
The documents collected towards identity proof to reflect the current address of the concern/firm
Identity Proof(any of the following documents):
Partnership deed, Shop & Establishment Act certificate, Latest Sales Tax assessment order, Sale Tax registration certificate.
Income Proof:(any of the following documents):
Audited Balance Sheet, Profit & Loss Account (latest two years) and the latest 2 years IT returns of the firm.

For Private Limited Companies:

Address Proof
The documents collected towards identity proof to reflect the current address of the concern/firm
Identity Proof:
Memorandum and Articles of Association (with registration certificate)
Income Proof:(any of the following documents):
Audited Balance Sheet, Profit & Loss Account (latest two years) and the latest 2 years IT returns of the firm.


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