Apply for Used Car Loans Some Handy Facts
Several banks and financial institutions in India provide low interest loans for cars at easy repayment facilities. Little or ‘no’ processing charge, transparency in the car finance terms and conditions and long repayment tenures make ‘used car loan’ provisions quite attractive here. However you need to keep in mind that the age of the car should be not more than 3-5 years (for SBI the maximum level is 5 years while for PNB it is 3 years). However, in rare cases some financial institutions offer car finance for vehicles with maximum age limit of 10 years (such as Mahindra finance car loan). SBI car loan scheme is a grand option to bail the car aspirants out with finance coverage for old cars.
SBI car loan eligibility criteria:
The applicant of SBI car loan should be within the age limit of 21-65 years. He/she should be a permanent employee of Government / PSU / Private Organization / Reputed Establishment ‘or’ a self-employed individual but should be an income tax assessee. Even a person associated with agriculture is also eligible to avail SBI car finance for old vehicles.
Minimum net annual income of the loan applicant should be Rs. 100,000/-.
Documents needs to be submitted:
The ‘used car loan’ applicant need to provide the following documents while submitting the properly filled up application form.
*Note: These documents are as per SBI car loan scheme criteria.
- Bank Account Statement of for the last 12 months
- Two passport size photographs
- Signature identification from bankers of the loan applicant
- A photo copy of Passport /Voters ID card/PAN card.
- Residence Proof
- Latest salary-slip in detail with break ups
- Income Tax Returns/Form 16: Salaried employees should provide IT Returns documents of the last 2 years and other ‘income group’ professionals should provide relevant document of the last 3 years.
- Remember that if you are a non-salaried person than you should submit official address proof.
*Note: If you are an account holder of a particular bank and want to avail car loan from another bank then you need to provide necessary documents to establish your proof of identity as well as the residence proof.
Keep in mind that several Indian banks offer a loan amount that extends up to 2.5 times of the annual net income of the car loan applicant. The income of parent or spouse is also taken into consideration. In this case he/she is considered as additional guarantor. Married loan applicant who wants to show his/her spouse’s income to determine the loan amount should accept the condition that his/her spouse should stand as co-borrower.
Car loan repayment period:
The car loan repayment period varies from bank to bank. PNB car loan criteria ask the borrower to repay the ‘financed’ amount together with interest for old car within 60 EMIs while for the SBI case the upper level is 84 months.
Make sure that the bank or financial institution that you want to approach for car finance maintains an excellent track-record of transparent practice. Banks like the SBI charges interest on daily reducing balance system. In this case the interest is calculated on the reduced balance as soon as the borrower makes an instalment. Car, be it new or old always holds a special value for its owner. So choosing the right car finance scheme is crucial.