Buying a car is a huge financial commitment. It's, in fact, one of the greatest milestones in one’s life but to fulfil this aspiration, one needs to save a good sum of money and may also rely on a car loan. A car loan can be your ultimate saviour if you want to finance your car purchase. However, before initiating the process of availing of a car loan, let’s learn about the factors that can affect your car loan eligibility.
Basic Eligibility Criteria of a Car Loan
The criteria for availing of a car loan in India can vary from one bank or NBFC to another. In general, they are as follows:
The minimum age for availing of a car loan is 18 years and the maximum age is up to 75 years.
Applicant must have a good credit score (750 or above).
The applicant must be living in India (rural or urban).
The net income per year must be at least ₹3,00,000 (it can include the income of the spouse or the co-applicant)
These are the basic criteria for availing of a car loan. Let’s move on to the 3 important factors that can affect your car loan eligibility.
Factors Affecting Your Car Loan Eligibility
1. Your Credit History
Lenders evaluate your credit score to see how you've paid back your previous or current loans. If your credit score is 750 or higher, it demonstrates that you have managed your finances carefully, and lenders are more likely to approve your loan application quickly.
2. Type of Car
Your car loan eligibility is determined by what type of car you are willing to buy with a car loan. Each car model has a resale value based on its popularity, features, and specs. For example, if you want to take a Maruti Suzuki Ertiga loan, then your loan eligibility will be high as the market value of this SUV car is high.
3. Employment Status/Business Longevity of the Applicant
A salaried employee asking for a car loan must have a minimum of one year of work experience at the current company and two to three years of overall work experience. If the applicant is self-employed, then they are required to have been in the same business for at least two to three years.
So, these are some of the important factors that affect your car loan eligibility.
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