Post Covid-19 pandemic, when offices and schools have slowly started re-opening, it has become necessary for us to step outdoors. However, the pandemic has not been completely eliminated from our lives; thus, we must take all the necessary precautions such as social distancing, wearing masks, etc. Further, we must ensure to maintain a safe distance and not move in large groups, and this is where private transportation comes into the picture.
After all, rather than traveling via public transport in huge crowds, it is much safer to commute via private vehicles. However, due to the increasing costs of living, it has become highly difficult for us to purchase new vehicles without burning a hole in our financial budget.
However, now we can not only enjoy private transportation but that too without disrupting our financial planning by simply opting for a car loan in India. After all, new-age banks and NBFCs (Non-Banking Financial Companies) provide auto loans at a way lower car loan interest rate as compared to traditional lenders.
Other than that, the various other benefits of opting for an auto loan in India are as follows:
1. Multiple options
There are a plethora of financial companies that not only provide a car loan to purchase new vehicles, but also provide a used car loan that will help you buy second-hand cars without any hassle. Further, a majority of these banks and NBFCs (Non-Banking Financial Companies) provide loan amount up to 100% of the on-road price. Therefore, you can easily buy a new car even if you don’t have much capital for the down payment. There are also additional perks that often come with a car loan such as insurance coverage, 24/7 roadside assistance, etc.
2. Flexible repayment solution
In today’s times, buying a car is as easy as purchasing a new dress, as you don’t have to pay the complete amount upfront. After all, financial institutions provide you with the option of flexible repayment in the form of affordable EMIs (Equated Monthly Instalments). Further, banks and NBFCs (Non-Banking Financial Companies) also provide you with additional tools such as finance blogs and an EMI calculator. An EMI calculator is an online tool that helps you to calculate your EMIs based on your principal amount, repayment tenure, and interest rates. Thus, helping you to properly calculate your repayment without putting a dent in your budget.
3. Affordable Interest rates
As discussed earlier, numerous financial institutions provide used car loans; thus, you can easily negotiate with the lenders regarding the interest rates. However, before you plan on negotiating the car loan interest rates, ensure that you have a good credit score. A good credit score is anything above 750; also, the higher your credit score, the more are your chances of obtaining an auto loan at the lowest interest rates. You can easily check your CIBIL score online. Further, if you want to improve your CIBIL score then ensure that you have repaid all your previous credit card bills and EMIs on time.
4. Quick processing
There are several banks and NBFCs (Non-Banking Financial Companies) online that provide unsecured auto loans at low car loan interest rate. This means, you don’t have to provide any sort of additional collateral in exchange for procuring your used car loan. After all, your car in itself is a security that will act as a form of security until you pay your loan amount. However, you need to have a steady source of income as per financial institutions’ eligibility criteria. Also, long gone are the days when you would have to visit lenders with a ton of paperwork, as many financial institutions provide the feature of paperless documentation. Thus, all you would have to do is upload the soft copies of relevant documents online, and get your loan approved within a few working days.
5. No need to use money from your wallet
Another benefit of opting for a used car loan is that you don’t have to initially shell out any amount from your wallet. After all, a majority of the car amount is being covered under the loan amount. Thus, you can utilize the cash for other purposes such as investments, business purposes, travel purposes, etc. Further, you can easily repay the loan amount over a certain period of time in the form of flexible EMIs (Equated Monthly Instalments).
However, before applying for a used car loan from a financial institution, ensure that you are meeting all the required eligibility criteria. Further, car loan eligibility criteria are different for every lender; however, a few common ones are as follows:
· Make sure that you have been working with your current company for at least 1 year, and have a monthly income of 35,000 rupees. In case you are a self-employed individual, then you should be working at least 3 years in the same company and should have a minimum annual income of 2 lac p.a.
· Although, age criteria vary from one financial institution to another; however, the average age of the applicant across banks and NBFCs (Non-Banking Financial Companies) should be above 21 years.
· Other than the above two factors, financial institutions also scrutinize your credit score and credit history. Thus, ensure that you have a credit score of 750+ and have repaid all your existing loan repayments and credit card bills on time. This will not only help you improve your chances of obtaining an auto loan but that too at the lowest car loan interest rate possible.
· The various documents required are as follows:
a. Proof of identity and address such as passport, driving license, Voter ID, etc.
b. Bank statement of the latest 3 months.
c. Latest 3 month salary slip for salaried employees, and the latest 2 year ITR along with an audit report of your income.
Hope you enjoyed reading this article regarding the various benefits of applying for a used car loan online in India. Good luck and all the best!
