How to Get a Car Loan in India: A Guide

Posted on Tuesday, July 21st, 2020 | By IndusInd Bank

Looking to purchase a new car that has just hit the market? With a car loan, buying your dream vehicle is within your reach. Here is all you need to know about getting a car loan in India.

Basic Covenants to be Aware Of

Before you get started, here are some car loan basics you should know:

• You can opt for a car loan from one of the many financial institutions in India, public and private. However, the car loan interest rate, repayment schedule, and tenure will vary. Once you undertake a loan, you will have to pay either fixed or variable Equated Monthly Installments (EMI) to the lender
• Most lenders offer car loans for both new and pre-owned cars, with varying car loan interest rates
• When you buy a car using a loan, your car is hypothecated to the lender. In the case of car loans, your car is essentially the collateral

Budget

Prepare a budget that accurately represents all costs associated with your loan. Most car loans have a tenure of 3-5 years. While estimating your budget for taking a car loan, take into account processing fees during the disbursement of loan and foreclosure charges if there is a possibility of you needing to close the loan earlier. Also, remember that loans finance roughly 80-100% on the ex-showroom price of a new car – you might have to pay the remaining amount like the insurance amount, RTO charges, registration fees, additional margin money etc.. At IndusInd Bank, we finance up to 100% on the ex-showroom price of the vehicle. This quantum varies for different car models and also depends on the borrower’s profile.

Shortlist Model

The lending rates, repayment tenures, and quantum of finance will vary for different car brands and models. While choosing a car model, keep in mind these factors. Check the loan details for a list of cars financed by your lender to avail of a profitable deal. At IndusInd Bank, we offer car loans for a wide range of new and used car models and have tie-ups with various car dealers across the country.

Check Eligibility

Your car loan eligibility will vary across lenders, based on your profile and income. Some primary factors that affect car loan eligibility are age, salary, employment type, and residence area. You can check your eligibility for an IndusInd Bank car loan here.

Choose a Lender

To get a car loan that best suits your needs, compare features like repayment tenure, lender tie-ups, interest rates, and other charges levied by various lenders before zeroing in on one.

At IndusInd Bank, we offer flexible repayment tenures and attractive interest rates for car loans on a wide range of car models. We also have tie-ups with an extensive network of manufacturers and authorised dealers. Our expert sales team helps you find the best deal on your car loan.

Decide on Tenure and Amount

The amount you canborrow to finance your car depends on your age, income, and chosen car model.Usually, the loan covers only 80-100% of the ex-showroom price of your car. Carloans do not include registration and re-registration, maintenance, insurance,and road tax charges.

The repayment tenure fora car loan depends on several factors like loan amount, the interest charged,and the annual income of the borrower.

Furnish Documents

Keep the followingdocuments handy before approaching a lending institution for a car loan–

• Passport-sized photo
• Proof of Identity (Passport, PAN Card, Voter ID card, orDriver’s license)
• Proof of Residence (Passport, utility bills, Voter’s ID cards,etc.)
• Proof of Income (IT returns with computation/Form 16 etc.)
• Evidence of Business (in case of businesspersons)
• Bank statements of the past 3-6 months

Book Your Car

Once you’ve done your research and selected a lender, it’s time to book your dream car. You can approach IndusInd Bank for a car loan through the following ways:

• Call us at our 24-hour customer care number 1860 267 7777
• Walk into the nearest IndusInd Bank branch
• Contact any of our Vehicle Finance Division offices or Personal Products Division Offices

Moreover, you need not have an account with IndusInd Bank to get a car loan, though having one could mean enjoying several benefits when taking out a loan. Apply for a car loan online with IndusInd Bank today!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.