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Overview of Key Considerations for Car Loan Eligibility Criteria

Attractive car finance terms and conditions as followed by majority of the banks and financial centres here have played significant roles behind this positive growth. However, there are certain eligibility criteria to apply for a car loan that are almost same across the financial institutes in India irrespective of their public sector or private sector status.

 

Car loan policies of Indian banks cover salaried employees of public and private sectors as well as entrepreneurs and self-employed individuals operating their personal business.

 

The general car finance structure in India follows the directives as laid down by Reserve Bank of India. The applicant’s income status and credit rating play decisive factors behind finalizing the ‘loan’ amount.

 

Age Criteria:

 

Salaried Employee Class:

As per the RBI guidelines, to become eligible for car loan the ‘salaried’ class applicant’s minimum age should be 21 years while the upper limit is 65 years at the end of the loan tenure.

 

Self Employed Group (Sole Proprietorship):

Minimum age of the applicant is 21 years while it should not cross 65 years at the end of the loan tenure.

 

Work Tenure:

 

Salaried Employee Class: Work tenure for at least 2 years, and a minimum of 1 year with the present current employer/company.

 

Self Employed Group (Sole Proprietorship): At least 3 years stint with the ongoing professional/business venture.

 

Income Criteria:

 

Salaried Employee Class: Annual income figure should be at least Rs. 1, 00,000 (including the income of the applicant’s spouse).

 

Self Employed Group: Minimum annual earning should be Rs. 60,000 for a standard car and Rs. 1, 00,000 for larger and premium car. The criteria are applicable for self employed individuals with partnership firms, private limited companies and director of a public limited company in the business of manufacturing / trading / services. However, barring sole proprietorship status, individuals falling under the remaining three self employed groups should register a minimum annual turnover of Rs. 4,50,0000.

 

*Note: Some Indian Nationalised banks require the loan applicant’s minimum net annual earning to be Rs.2, 50,000.

 


Required Documents:

 

Salaried Employee Class:  

 

  • Passport copy, PAN Card, Voters Id car, driving licence as ‘Identity Documents’.
  • Latest salary slip along with form 16 as income proof
  • Any of: Ration card, Driving licence, Voters card, passport copy, telephone bill, electricity bill, Life insurance policy PAN Card as address proof.

           

Self Employed Group (Sole Proprietorship):

 

  • Passport copy, PAN Card, Voters Id car, driving licence as ‘Identity Documents’.
  • Latest ITR as income proof
  • Any of: Ration card, Driving licence, Voters card, passport copy, telephone bill, electricity bill, Life insurance policy PAN Card as address proof
  • Bank statement is required for mid - sized car onwards, including premium cars. However, several banks consider bank statement waiver option if the applicant’s earning exceeds Rs. 1.5 Lakhs.

 

Self Employed Group (Self-employed Partners in Partnership Firms & Owners of Private Company Dealing with Manufacturing, Trading or Services):

 

  •  *Identity proof is not required in this case
  • Audited balance sheet, Profit and Loss Account for latest two years as well as the company’s IT returns for the same period as income proof
  • Any of: Telephone Bill, Electricity Bill, Shop & Establishment Act certificate, SSI registered certificate, Sales Tax certificate as address proof
  • Bank statement is required for mid - sized car onwards, including premium cars. However, several banks consider bank statement waiver option if the applicant’s earning exceeds Rs. 1.5 Lakhs. Bank statement is required for mid - sized car onwards, including premium cars. However, several banks consider bank statement waiver option if the applicant’s earning exceeds Rs. 1.5 Lakhs. However it is not required for self employed persons of private limited companies.

 

Self Employed Group (Director in a Public Limited Company dealing with Manufacturing, Trading or Services):

 

  •  *Identity proof is not required in this case
  •  Income Proof: Audited balance sheet, Profit & Loss Account for latest two years as income proof
  • Any of: Telephone Bill, Electricity Bill, Shop & Establishment Act certificate, SSI registered certificate, Sales Tax certificate as address proof

*Bank statement is not required here.

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