I just got a new job, it’s just been a month. I earn around Rs. 25000 per month. When I tried to get a car loan, my loan request was rejected since I’m a fresher. So what is the criteria/eligibility to get a car loan? Thank you.
It is important to check the eligibility criteria when you plan to apply for a car loan. Job experience and consistency are such criterion due to which your car loan application would have been rejected. Minimum 2 years of job experience is compulsory to avail a car loan and a continued job for minimum 1 year is also important. Following are the eligibility criteria to get a car loan:
- Minimum 2 years of job experience.
- Job stability for last 1 year
- Minimum annual income should be not less than Rs 1.5 Lac
- Age criteria of minimum 21 Years to a maximum 60 Years.
- IT return for last 2 years for a salaried employee
- Valid Identity and address proof such as PAN card, Driving license, Voter Id card etc
The loan amount allowed by bank depends on your salary. Normally banks allow 4 times of net annual salary or 48 times of net monthly income, whichever is low. Banks finance up to 90% of car value (Over on road price). Apart from all above criteria, the credit history of the applicant is most important factor to get a car loan from banks.
Eligibility for Car Loan differs from bank to bank. But broadly speaking, you must be 21-75 years earning at least Rs. 20,000 per month.
Factors Affecting Car Loan Eligibility?
Income levels: Higher the income better the chances for a higher loan amount
Income regularity: Regular income improves chances for loan approval
Kind of car: New cars are more easily financed than used cars; a high-end model will be expensive which means the borrower has to be able to pay the required down payment.
Long tenure will enhance repayment capacity
Car Loans are available for both salaried and self-employed individuals filing regular IT returns. Depending on your personal relations with the bank, one can get a Car Loan up to 90% of the car value. Banks verify the personal income tax statements to decide the overall loan limit to be offered for each client. They also do a background check of the Credit History of every client to assess the creditworthiness. Users with a bad credit history/ Credit Score are likely to be declined a loan. Generally a Credit Score of more than 700 points is considered to be a good score for the bank to approve your Car Loan application.