Things to know while opting for a car loan | Fusion - WeRIndia

Obtaining a car loan is easier than getting any other loan. Banks provide a loan based on the eligibility of customers. Some banks even offer 100 per cent funding on the ex-showroom price for the eligible customers.

Keep the following things in mind before opting for a car loan from a bank:

• Though many banks provide 100 per cent funding, experts advice to put your margin money up to 20 per cent to avoid higher EMIs.
• Check the interest rate on a car loan of various banks before taking it. At present, Punjab and Sind Bank offers the lowest interest rate of 7.1 per cent, followed by the Central Bank of India with an interest rate of 7.25 per cent.
• You should also check for hidden costs like processing fee, documentation fee, credit report fees, registration card collection fees, foreclosure charges, late payment charges etc. Choose the bank based on the fees.
• EMIs depends upon the loan amount and tenure. Ideally, many customers prefer the loan tenure for seven years. You can even opt for a lower tenure. If your bank offers a longer-term, you can also consider it.
• Keep all your documents ready to be submitted to the bank to get a loan hassle-free. Normally, banks ask for your KYC documents like Aadhaar card, PAN card etc. You have to submit your income proof documents like salary slips for the last three months, the latest IT Returns, and bank statement for the last six months.
• The eligibility criteria of applicants for a car loan is different for various banks. Many banks accept the following eligibility criteria: The applicant must be between 18 and 75 years. His or her monthly income should be at least ₹20,000. They should have been employed for at least one year with the same employer. If the applicant is self-employed, they must have ITRs and bank statement for income proof.

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