Owning a car has become a necessity rather than a luxury. Fortunately, today with the emergence of several financial institutions, interest rates for car loans are less and online car loans can be availed within no time. If you apply for car loans online, you can get 100% financing of on-road price for select models with interest rates starting at 7% p.a. and flexible tenures of up to 8 years.
This post takes you through how to apply for a car loan online in India, interest rates, documents required, eligibility criteria, loan foreclosure, tax benefits, and more. Read on!
|Loan Amount||Up to ₹20 Lakh|
|Interest Rate||9.9% to 45% p.a|
|Tenure||Up to 72 months|
To avail of car finance, follow the steps given below:
Go to the lender’s website or download the app and go to the Car Loan section.
Check your loan eligibility and EMI obligations using online car loan eligibility and EMI calculators.
Once you have checked the loan amount you are eligible for, click on ‘Apply.
Submit all the mandatory documents. These may vary from lender to lender.
Link your bank account details so that the loan amount gets credited to your account instantly.
The lender will run the final eligibility, credit score check considering they are satisfied with the documents that you have submitted. The timeline between loan application and disbursal may vary from lender to lender. Once your loan is approved, you will get the amount credited to your car loan account. Note that the final amount and interest rate are decided by the lender based on your credit history, repayment capacity, etc. If have an excellent track record, you might get approved for 100% financing for your car.
Rate of Interest (P.a)
Loan Tenure (Months)
Here are a few documents you need to avail a car loan:
The basic eligibility criteria required for applying for a car loan are as follows:
Here are a few noteworthy features and benefits to apply for a car loan online-
The entire process of availing of car loans online is fast and easy if you have the required documents at your disposal. The loan application gets instant approval, and your funds are credited to your bank account instantly.
Like personal loans, car loans require only minimal documents to complete the process. All you need is your income proof, PAN card and Aadhar card. However, this may vary from lender to lender.
You can customise a repayment plan according to your convenience. Choose the EMI plan based on your income and outgoings. The repayment tenure usually ranges between 5 and 8 years.
Low-interest rates car loans can be availed online without difficulty if your credit score is 750 or above.
You can calculate your car loan EMI with an online EMI calculator. This will help you choose your loan tenure accordingly.
|Choose the option that offers the best interest rates for car loans.||Do not apply for a loan amount above your eligibility, as this might increase the chance of rejection.|
|Read about the insurance premium of your car as it is a recurring cost.||Do not opt for a car with high maintenance costs as this may increase your financial burden.|
|Check out offers before applying for a car loan.||Do not rely on dealers for applying for a car loan as they may not give the best interest rates for car loans.|
Here are a few tips to get your loan approved faster –
Ensure to have a good credit score to get your car loan approved faster. A minimum of 650 and above is a requirement for availing of a car loan.
Make sure to pay your already existing loans on time, because that indirectly reflects your credit history. Avoid penalties and keep a clean record of improving your chance of getting a new car loan faster.
To avail of a new car loan faster, be prepared with your down payment and other required documents. If the miscellaneous formalities are completed, the chances of your loan being rejected are less.
If you’re planning to apply for a car loan, you must think and understand about foreclosing the loan. Foreclosing means that the applicant decides to pay back the loan amount before the tenure terminates. Most financial institutions charge a penalty fee, although a few lenders allow you to foreclose the loan without any penalty. Once you have foreclosed the loan, you will get full ownership of the car. Before deciding to foreclose the loan, take a look at the rules and regulations prescribed by the institution to understand if foreclosing a loan attracts penalties or not.
Foreclosing a loan would only be a good option if your income has increased and you wish to clear off your liabilities.
Car financing essentially means that the applicant will take a new loan to repay the balance of the existing car loan. People go for the refinancing of car loans if they wish to save money. You may choose to refinance your auto loan to enjoy low-interest rates, an extended tenure period and a reduction of EMI payment burden.
Car refinancing should only be opted if the interest rates on car loans have been reduced from that of the original loan, or if your financial condition has improved. However, refinancing a car loan would not be a prudent decision if you have already paid a substantial amount of the original loan or if the value of your car has depreciated.
If you decide to purchase an electric vehicle (EV) with the help of a loan, it could help you save a considerable amount of money. As a part of the government’s efforts to curb pollution, the government has introduced many benefits for purchasing an electric vehicle. The Finance Minister in the Union Budget of 2019-2020 announced a tax rebate of Rs. 1.5 lakh on the interest paid for an electric car loan. Therefore, you will be able to get a benefit of around 2.5 lakhs during the entire tenure of the loan. The government has also reduced the tax rates on electric vehicles from 12% to 5%.
Though this may vary from individual to individual, however, there are plenty of reasons that make personal loans a more viable option that car loans for auto refinancing.
Applying for personal loans through Navi is a straightforward and fast process. It does not require much documentation, and the technology-driven process of Navi checks your loan eligibility within minutes. Navi offers an EMI calculator where you can easily check your EMI plan and other loan-related amounts. Install the Navi app now!
The maximum amount that can be availed for a car loan is 85% of the on-road price. The banks will also check the monthly income before deciding on the loan amount. Usually, 0.6% of the income is set as the loan limit.
Interest rates on car loans can get affected owing to several factors, including but not limited to your credit score, monthly/annual income, repayment capacity, existing debts, credit history, etc.
You can prevent your application’s rejection by complying with all the eligibility criteria and having a good credit score. Also, make sure to submit documents with accurate details at the time of applying for a car loan.
The loan amount varies from lender to lender. Most car loan providers offer loans up to 90% of the car’s on-road price. However, there are certain lenders that offer 100% financing.
You can make part-prepayments or full repayment, as in foreclosing your car loan. However, some lenders may charge a car loan foreclosure fee. So, make sure to check with your bank regarding additional fees and charges before prepaying your loan.
Covering a major portion of your car’s price with a down payment is always a good practice. That way, you will have a lower amount to apply for, which means you will have lesser debt liability. Also, certain lenders offer lower rates when you make a lump sum down payment.
Having a good credit score always helps. Lenders offer preferential rates to customers having a credit score above 750. So, keep your credit score above the average mark and you may get better deals on car loan interest rates.
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