Car loans are among the most common types of loans taken by Indians. The number of vehicle owners in the country is rapidly rising and most people rely on these loans to get behind the wheels of their own cars. Fortunately, a car loan is quite easily available nowadays. If you have the correct documents and qualify for the loan, you can directly approach the loan provider and get the loan. You need not approach an agent. Take a look at this article to know more about the important documents you need to get a car loan on your own.
Important documents needed for a car loan
Here are the three most crucial documents you need when applying for a car loan:
- ID / address proof: You need to submit a copy of a basic KYC document like your passport, aadhaar card, PAN card, voter’s ID card or driver’s licence. This document will act as your ID proof and (in most cases, save for the PAN card), will also act as an address proof. You can also use the KYC documents to verify your age as a person above the age of 18 only can apply for a car loan.
- Income proof: Next, your loan provider would need your income proof. You must have an earning high enough to afford the car loan and pay the monthly EMIs. To convince the loan provider, you must submit your salary slip and your income tax returns of the two previous years.
- Bank balance: Your income is not enough – you should also have a stable bank balance. To show this, you are required to submit the bank statements of the last six months to your loan provider when applying for a new or a used car loan. This is applicable to a salaried as well as a self-employed person.
If you have these three main documents with you, you can easily apply for and get a car loan of your choice.
Things to remember when taking a car loan
You must keep a few things in mind when taking a car loan. They are:
- Borrow as per your means: You may be eligible for a high car loan, but don’t borrow that much if it is beyond your means. This means that if you are in a state to buy and use a Maruti Suzuki Alto, do not aim to buy a BMW just because a larger loan is available to you. You will have to repay the loan eventually and if you borrow beyond your means, you may find the job rather difficult later on.
- Select a good EMI pattern: Never be in a hurry to pay off the loan. You must have a practical and affordable EMI scheme that you can easily manage. Review your economic capacities and then finalise the EMI scheme when taking a new your used car loan.
- Explore your options properly: Rather than taking the first loan your bank offers, explore all the available car loans options and then select the one that is most suitable for you. Not just banks, but also the good and top rated NBFCs also offer car loans these days. See which loan is available at what rate and make an intelligent choice.
- Keep an eye on the downpayment: Your loan provider will not lend the complete amount of the car to you. You can only borrow a certain percentage of the price. The remaining needs to be paid from your own pockets. This is known as the downpayment. Be careful when selecting the downpayment and finalise an amount you can afford.
The bottom line
Car loans are very handy as they help you to get your own car on your own terms. Thankfully, you can easily and conveniently get a car loan in just a few minutes if you apply online and submit the correct documents. Now that you know what documents you need, go ahead and apply for your car loan right away. Keep all the points mentioned above in mind and you will soon find your ideal car loan offer. Take the loan and get set to drive your own, dream vehicle.