While it's easy to take advantage of a car loan once you've
agreed on the car you want to purchase, you must understand all the criteria in
detail. You would need to submit proper documents precisely as requested by the
lender and be prepared for additional requirements including credit score, down
payment, etc. Here's a definite rundown of documents
required for car loan –
Documents mandatory for availing a car loan
Income proof
Many lenders would first review the earnings and assess the
ability to repay through the same. You would need to submit your bank statement
as requested by the lender and payslips of three to six months. Furthermore,
self-employed individuals would need to show audited balance sheet, profit
& loss report from the last two years, business income tax returns from the
previous two years, and bank statement from the last six months.
Residence proof
You will need to submit a utility bill with your residential
address in it for proof of residence. The lenders would know where to find you
through this if you stopped paying the dues. You will also need a driving
license if you plan to drive the car yourself. Valid documents include
telephone bills, electricity bills, Aadhar cards, ration cards, life insurance
policies, passports, voter identification, driving licenses, etc.
Identity proof
You will need to present a valid photo ID with your
signature in it to prove your identity. Passport, Aadhar card, Voter card,
driving license, PAN card, etc. are valid IDs. You will need to provide a proof
of identity that will also have your date of birth as a proof of age.
Trade-in Documentation
If you are selling your old car or vehicle to purchase a new
one, the relevant documents must be provided for the vehicle you are
exchanging. Your old vehicle's title and registration papers will help the
creditor determine the vehicle's accurate value. This would then affect the
total loan you would need.
Additional conditions for a car loan in India
Credit Record
It is essential to have a good credit history and a low
debt-to-income ratio to take advantage of any kind of loans. This would allow
you quickly and without hesitation to approve car finance from the lender. The loan
amount, as well as the rate of interest that would be applied, would also be
determined by your credit score.
Make & Model
You would also need to describe the car you are going to
buy. The estimated value of the vehicle must be presented as received by the
dealership.
Additional Guarantees
A car is a collateral in its own right. Nevertheless, if you
intend to protect the loan as collateral with additional assets, it would help
you deal with the interest rate easier. In this case, for that particular
asset, you would need to provide the complete details that would help the
creditor assess the value of the same.
