Check car loan eligibility criteria: Axis, HDFC, ICICI and Kotak Bank etc

Like every other loan, to avail a car loan, you need to meet a few eligibility criteria. Car loan eligibility may have a couple of points that may vary from bank to bank, but on the whole, all banking and financial institutions who issue car loans have a fixed set of terms and conditions that determine your eligibility.

Some of the common factors in determining your car loan eligibility include the following. As mentioned above, the age and income criteria would vary slightly from bank to bank.

 

Banks will also require the applicant to be in a job or a business for at least 2 years. For salaried employees they may need to spend at least one year with the current employer and they would need to be in a job for 2 years.

As far as the maximum age is concerned it can also be fixed as per as the end of the loan tenure is concerned. So if the maximum age is 65 years and the loan tenure is 5 years you can get a loan only up to the age of 60.

Also there is an upper limit as far as the loan amount is concerned. It could be fixed at a certain multiple of income or earnings depending on whether you are a salaried or self employed individual. Higher the income, higher the eligibility.

The bank will also estimate your EMI payment capacity based on your fixed expenses and existing EMIs.

 

Car Loan Eligibility Calculator and CIBIL Score

When you apply for any loan, including a car loan, then lender would like to know about your credit history which shows your track record as far as payment of existing loans are concerned. For that purpose a lender would look up your credit score to see whether you have the ability to repay a loan. There are a few credit information companies, out of which CIBIL is considered the leader.

CIBIL score can vary between 300 to 900 and the higher is your CIBIL score, the better are your chances of getting a loan.  There is no minimum CIBIL score that you would require to be eligible for a car loan but if you have a CIBIL score of above 750 your chances of getting a car loan is higher. When you have a high CIBIL score, you can also negotiate for better terms on your loan and a better interest rate.

It is possible to get a loan without a good CIBIL score too. But in that case the loan may not come with favourable conditions. For example you would most likely be charged a higher interest rate or have a shorter repayment period. Your CIBIL score is affected negatively if you do not make payments of our loans and credit card outstanding on time, use up the whole credit limit of your credit card or if your loan applications have been rejected.

 

Car loan eligibility for banks in India

As we have seen above the car loan eligibility criteria is basically the same for all banks but they differ on some points. Let us take a look at car loan eligibility for some banks in India.

 

SBI Bank Car Loan Eligibility

 

HDFC Car Loan Eligibility

Salaried Individuals:

This includes employees of private limited companies, employees from public sector undertakings, including central, state and local bodies. Individuals who are a minimum of 21 years of age at the time of applying for the loan, and no older than 60 at the end of the loan tenure. Individuals who have had a job for at least 2 years, with a minimum of 1 year with the current employer. Those who earn a minimum of Rs. 3,00,000 per year, including the income of the spouse/co-applicant. Individuals who have a telephone/post-paid mobile.

Self Employed Individuals and Professionals (Sole Proprietorship):

This includes self-employed sole proprietors in the business of manufacturing, trading or services. Individuals who are a minimum of 21 years of age at the time of applying for the loan, and no older than 65 at the end of the loan tenure. Those who have been in business for a minimum of 2 years. Should earn at least Rs. Rs. 3,00,000 per annum.

 

 ICICI Bank Car Loan Eligibility

 

Axis Bank Car Loan Eligibility

Salaried individuals who are eligible for a car loan

Minimum 21 years of age

Maximum 70 years of age at maturity (conditions apply)

Minimum Net Annual Salary of Rs. 2,40,000 p.a. for all approved car models

Income eligibility based on latest salary slip and Form 16

Minimum of 1 year continuous employment

 

Self-employed individuals who are eligible for a car loan­­­­­­

Minimum 18 years of age

Maximum 75 years of age at loan maturity

Minimum Net Annual Business income of Rs. 1,80,000 p.a. for ­­selected models and Rs. 2,00,000 p.a. for others

Income eligibility based on latest Income Tax Returns

Minimum 3 years of employment in the same line of business­­­­

 

Punjab National Bank Car Loan Eligibility

 

Canara Bank Car Loan Eligibility

• All individual borrowers / professionals are eligible.
• Salaried individuals should have a minimum gross salary of Rs.3.00 lakh p.a. Minimum NTH after proposed instalment should not be less than 25per cent or Rs.12,000/- whichever is higher.
• Other than salaried individuals should have a minimum Gross Annual Income of Rs. 3.00 lakh p.a. as per latest ITR/ITAO subject to 3 years Gross Average Annual Income of not less than Rs. 2.50 lakh. Minimum NTH after proposed instalment should not be less than 25per cent or Rs.12,000/- whichever is higher.

 

Kotak Mahindra Bank Car Loan Eligibility

All Indian Residents

Minimum income of Rs. 15,000 per month

Minimum residence stability of 1 year

Minimum employment stability of 1 year

Minimum 21 years of age

 

Central Bank of India Car Loan Eligibility

All individuals of age 18 years and above and maximum age up to 65 years which includes permanent salaried employees/ self-employed persons/ independent entrepreneurs who have a regular source of income.

The gross annual income for salaried / non-salaried individuals needs to be Rs 2.4 lakh.

 

How to calculate car loan eligibility?

As we have seen above, different banks have different eligibility criteria for car loans. You can visit different bank websites and find out if you meet their eligibility criteria.

Banks will also have car loan eligibility calculators on their websites which help you calculate your car loan eligibility by putting in information like the amount of loan your require, residence stability and work information.

Both salaried and self-employed individuals will have to submit a set of documents before the bank or NBFC issues them a car loan.

In case you’re buying a used car, then you need to meet the following requirements:

-        In case you’re a salaried individual, you need to earn a minimum salary of Rs 3 lakh per annum. Furthermore, you should be employed by a company for a minimum of two years, while working with your current employer for at least a year

- In case you’re self-employed, you should earn a minimum annual income of Rs 2 lakh, and should be involved in your business for three years.

You would need to submit the same set of documents to avail the used car loan.

The other way to calculate car loan eligibility is visit the MoneyControl website and use the car loan eligibility calculator as mentioned in the paragraph below to find out your car loan eligibility for different banks.

 

Car Loan Eligibility Calculator

Car loan eligibility calculators can calculate how much a bank will give you as a loan amount to buy your dream vehicle. Through the calculator, you can determine the percentage of the maximum loan that the bank sanctions. The maximum loan amount and loan tenure vary on a number of factors. These include whether you’re buying a new car or a used one; the EMI amount you pay; and the value of the car, whether new or used.

With MoneyControl’s car loan eligibility calculator, you will be able to compare loans offered by various banks, so that you can choose the one that matches your requirements. You can begin by clicking whether you’re looking for a new car or a used car and other details like your residence stability, type of car you are looking for and work information.

With the eligibility calculator you can know which lenders will provide you the amount of loan you are looking for and if you meet the eligibility condition.

 

FAQs

What is the typical tenure of a car loan?

The tenure of a car loan can be as less as one year, going up to five years. Some lenders also offer a tenure of up to seven years. The longer the tenure, the lower the EMI and vice versa. You have to pay more interest as the tenure goes up.

Do I need to provide a security or collateral when taking a car loan?

The car you purchase is itself the collateral and no other collateral is required. During the loan repayment period, the vehicle is hypothecated to the lending institution.

How do I repay a car loan?

The loan can be repaid through post-dated cheques in favour of the bank. If you have an account with the bank, you can issue a direct debit mandate or go for the ECS option.

What is fixed and floating interest rate? What should I go for?

Banks will offer you both fixed and floating rate interest on your car loans. In case of fixed interest rates, the interest rates remain constant for the entire period of the loan while floating interest rates change according to the base rate. Fixed interest rates are higher than floating interest rates.

Floating rate interests are generally a better option as you can reap the benefits when the interest rates fall. The EMI in case of a floating rate of interest may change from time to time.  However fixed interest rates, though higher, give you an idea of the EMI you have to pay for the entire tenure of your car loan. If you can plan your finances and the EMI is manageable and the fixed rate of loan is not too high, you can go for a fixed interest rate loan. The choice would entirely depend on you.