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Last Updated : Aug 13, 2019 03:00 PM IST | Source: Moneycontrol.com

HDFC car loan: Eligibility, documentation, fees and charges etc

HDFC Car Loan: HDFC Bank's car loans are available for both salaried & self-employed individuals with competitive rates of interests. Click here to get offers on car loans for new and used cars.

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HDFC Bank Car Loan


Planning to buy a car? Looking for a loan? HDFC Bank offers custom-fit loans which come with features for every car buyer. HDFC Bank’s car loans, be it for used new or used cars, will help finance your dream to own a car.

The bank offers attractive EMI schemes that may fit the budget of just about anybody. While almost all banks and lenders offer car loans, HDFC bank gives exclusive offers such as 100 percent financing, flexible tenures and pocket-friendly EMIs. The loans are available to both salaried individuals and self-employed individuals. The bank also promises a bigger car with the EMI of a small car.

The entire application process is available online, it is paperless and you can get approval in minutes. The whole process is hassle-free and you can get your funds within minutes of applying. If you are an existing customer of HDFC Bank, you will get special benefits such as a reduced rate of interest.

Why choose HDFC Bank Car Loan


Almost all banks and lenders offer car loans these days. However, HDFC Bank Car Loans are a class apart because of their unique features. The application process is swift, online and hassle-free. The bank takes only minutes to approve your loan, making it one of the fastest loan approvals in the country.

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Apart from that the bank offers various custom-fit features to customers who can buy a car of their choice in small instalments. There are special EMI schemes for individuals whose incomes are likely to increase in future. You can buy bigger cars with EMI of smaller cars.

The bank also offers insurance packages to customers. For HDFC Bank customers, there are discounted interest rates. While most banks and lenders charge a penalty for closing loan accounts early, the HDFC Bank offers zero foreclosure and prepayment charges.

 

Features of HDFC Bank Car Loan


HDFC Bank offers exclusive benefits on its car loans. Here are some of the features:

Flexible repayment option

You can opt for a step-up EMI system which means you start out by paying a lower EMI and gradually increase your payment and get your loan repaid faster. You can also opt for the balloon EMI scheme, where you continue to pay a small EMI every month and pay a large part of your outstanding at the end of the tenure. The balloon scheme may benefit those planning to upgrade their car later.

Zero Foreclosure Charges

If you decide to pay a part of your loan or the full outstanding earlier than your loan tenure, no foreclosure or prepayment charges will be levied on you. So you can close your loan account at any time you want.

Loan amount and top up loans

You can avail loans up to Rs3 crore of cars or 100 per cent financing on a new car on its on-road price. If you have an existing car loan, you can get a top-up loan without documentation.

Tenures

You can choose from a tenure of 12 months to 84 months (i.e., from one year to seven years).

 

Benefits of HDFC Bank Car Loan


HDFC Bank’s car loans stand out from the loans of other banks for its exclusive benefits. The bank provides up to 100 per cent financing of new cars. The bank also offers two schemes—Step-up EMI and balloon EMI—offering its customers the choice to repay the loan at their own pace.

The application process is online and extremely hassle-free. It takes less than 10 minutes to submit and application and get a response from the bank. If all documents are submitted properly and your loan is approved, funds will be credited to your bank account within a month. If you are an HDFC customer, funds are transferred within seconds of approval.

The rates of interest offered by HDFC Bank are competitive. Existing HDFC Bank customers will also get the benefit of lower interest rates. The bank does not charge its customers for repaying their loan ahead of time as there is no foreclosure or prepayment charge.

The bank also provides insurance offering protection against permanent total disability, accidental death and accidental hospitalisation. The loan facility as well as the dedicated customer service is available all days and nights.

 

HDFC Bank Car Loan Eligibility Criteria


The HDFC Bank Car loan is available to both salaried and self-employed individuals. Following are the people who are eligible for the loan:

Salaried individuals: Any person working in a private company, public sector company, state government, central government as well as local bodies is eligible for this loan. The person must be at least 21 years old at the time of applying for the loan and not older than 60 by the end of the loan tenure. The person must have had the job for at least two consecutive years. The total income of the family, including spouse, should be at least Rs3 lakh a year.

Self-employed individuals: Any individual, who is self-employed or is a sole proprietor of a manufacturing, trading or services unit, is eligible for this loan. The person must be at least 21 years old and should not exceed 65 years at the end of the tenure of the loan. They must have been in business for at least two consecutive years. The firm should earn a minimum of Rs3 lakh per annum. Self-employed partners in a business are also eligible as are directors of any public limited companies.

 

Documents required for HDFC Car Loan for Salaried Employee


To apply for a car loan with the HDFC Bank, you have to submit an income proof, an address proof, an identity proof and an age proof. Here are the documents that you can submit:

As your identity proof, you can submit any of the following: Aadhaar Card, Passport, PAN Card, Voter’s ID or Driving Licence. The same will be considered valid age proofs. As your income proof you need to submit your latest salary slip and Form 16 (your income tax return). You can submit Aadhaar Card, Ration Card, Driving Licence, Voter’s ID, Passport, Telephone bill, gas bill or electricity bill as your address proof. You can also submit your Life Insurance Policy as your address proof. Apart from these documents, you will also need to submit your bank statements for the previous six months.

 

Documents required for HDFC Car Loan for Self-Employed


If you are the sole proprietor of your company, you can submit Aadhaar Card, Passport, PAN Card, Voter’s ID or driving licence as your identity proof. As income proof you have to submit your latest income tax returns. As address proof, you can submit Aadhaar, Ration Card, Driving Licence, Voter’s ID, Passport or telephone/ gas/ electricity bill. Your Life Insurance Policy can also act as an address proof. Apart from these you need to submit you bank account statements for the past six months.

If it is a partnership firm and you are one of the partners or you are a self-employed individual in a private limited company or a public limited company, your income proof has to be submitted in the form of: Audited Balance Sheet, Profit and Loss Account of the previous two years or the Company ITR for the previous two years. Your address proof will be in the form of Telephone Bill, Electricity Bill, Shop & Establishment Act Certificate, SSI Registered Certificate or Sales Tax Certificate.

 

HDFC Car Loan Interest Rates


Interest Rate is the charge that a bank or lender asks from a borrower for taking a loan. The interest rate is calculated per annum.

HDFC Bank offers flexible interest rates on its car loans. The bank offers custom-fit rates to customers depending on the car the borrower wishes to purchase. The interest rate also varies depending on the segment of the car , make of the car and the tenure for which the borrower wants a loan.

In the period of January to March 2019, the bank charged a minimum annual percentage rate of 8.86 per cent on its auto loans. The maximum annual percentage rate during the same period was as high as 17.93 per cent, the average rate being 9.86 per cent. This interest is applied on the total borrowed value and is a part of the EMI.

The interest rate that the bank may charge from you will depend on which car you wish to buy, how much down payment you are willing to make, and within what time frame you wish to pay your loan back. For existing HDFC Bank customers, the bank offers slashed interest rates as an exclusive benefit.

 

HDFC Car Loan Fees and Charges


Apart from interest rates, banks and lenders often charge other fees and charges on the loan. HDFC Bank, too, has charges over and above he interest rate. Here is a list of the charges levied by HFC Bank:

Documentation Charges: The bank charges Rs630 for processing and preparing your loan document per case.

Foreclosure Charges: This is a penalty levied on the borrower for closing the loan account ahead of time. The bank now offers zero foreclosure charges for new car loans. The bank does not allow any foreclosure within six months of availing the loan. However, if the scheme is not available to you, you may have to pay 6 per cent of the outstanding for closing your loan account within 1 year from the seventh EMI. The charges are 5 per cent of the outstanding if you wish to close the account within 13 to 24 months from the first EMI. If you close the account after 24 months from the first EMI, the foreclosure charge will be 3 per cent.

Pre-payment or part-payment Charges: This is a penalty levied on the borrower for paying a large part of the outstanding balance ahead of time. The bank allows part-payment only after completion of 12 months since availing the loan. You can make only two part payments during the entire loan tenure and only one part-payment can be made in a year. The part-payment cannot exceed will 25 per cent of the principal outstanding at any given point. While the bank is now offering zero part-payment charges to some of its customers, the usual charges are  5 per cent on the part payment amount if payment is done within 13 to 24 months from the first EMI. The penalty is 3 per cent on the part payment amount in case part prepayment is made after 24 months from the first EMI.

 

HDFC Car Loan Additional Fees and Charges


There are a host of other charges that the bank levies on borrowers.

Loan cancellation: In case the loan is cancelled, the borrower will have to pay interest charges from the date of disbursement of loan till the date of cancellation of loan. The Processing Fee, Stamp duty and Documentation Charges are non-refundable charges and would not be waived/refunded in case of loan cancellation.

Processing Fee: This is the fees that the bank levies on a borrower for processing the loan application. HDFC Bank charges a processing fee of 0.4 per cent of the loan amount. The fee is a minimum of Rs3,000 and does not exceed Rs10,000.

Overdue EMI interest: If you do not pay your EMI on time and your payment is overdue, the bank will charge a penalty of 2 per cent per month.

Loan Reschedulement charges/ rebooking charges: The bank charges Rs1,000 for loan reschedulement or rebooking. If changes are required on RC, refundable Security Deposit – non-interest bearing of Rs5,000 will be charged by the bank.

 

HDFC Car Loan EMI Calculation


The EMI or Equated Monthly Instalment is the most important aspect of a loan for the borrower. Before applying for a loan, the borrower would want to get an estimate of how much he or she may have to shell out monthly for the loan. This helps you plan your finances and budget better.

The EMI is calculated based on the principal loan amount, the tenure for which you wish to take the loan and the interest rate which is compounded annually. So you can see that your EMI is dependent on three variables—the principal, the tenure and the interest rate.

By trying out various combinations with these variables, you can achieve the desirable EMI. If you wish for a short-term or mid-term loan, you will have to pay a slightly higher EMI. But on the plus side your loan will be repaid sooner. If you want to pay smaller EMIs, you can do so by opting for a longer tenure. Which tenure is ideal for you will depend on your financial health, goals and your future.

Since EMI is the most important part of a loan and influences decision-making of the customer, almost every bank and third party website offers a special tool – the EMI calculator—so you can calculate your EMI instantly.

 

HDFC Car Loan EMI Calculator


The HDFC Bank Car Loan EMI Calculator is an online tool available on the bank’s website for prospective car loan buyers. The EMI calculator is easy to use and gives you an estimate of the EMI you may have to pay to the bank if you take a car loan.

To use the tool, start with the loan amount. Key in the desired loan amount as the principal of the loan. Then decide on the tenure that you want to pay the loan through. For instance, your loan amount is Rs1 lakh and you choose a tenure of 12 months. You will be asked to put in the rate of interest. Considering the bank’s average rate of interest in the last quarter, let us input 9.86 per cent. Based on these figures, your EMI is estimated to be Rs8,785. You can now tweak the tenure to see which EMI suits you better.

The EMI calculator will also give you a break up of your loan over the tenure and amortisation schedule. You can make use of this schedule to plan your budget.

 

How to apply for HDFC Car Loan


The application process for a car loan at HDFC Bank is fairly simple. You can either walk in to a branch and ask for the application form or apply online. To apply online, you can fill in your mobile number and verify it using an OTP that will be sent to your mobile number. If you are existing customer of HDGC Bank, you can apply directly using your customer number.

You can then fill in your details about yourself and the car that you wish to purchase. Make sure you have checked your eligibility for the loan to avoid any rejections. You can soft submit copies of your identity proof, age proof, income proof and address proof.

Once you have filled out an application, offline or online, the bank will verify the details and check your eligibility for the loan. The bank takes around 10 minutes to approve a loan. If you are an existing HDFC Bank customer, you loan may be approved in minutes and funds credited to your account instantly. Otherwise it takes about a week to  process an application after the loan has been approved.

 

How to check HDFC Car Loan status


Developments in your loan will be intimated to you through text messages and emails. However, there are ways you can check the status of your loan in an HDFC bank. You can either visit the branch where you applied for a loan and ask for the status or you can check the status of your loan online.

You can call the 24x7 customer care for loan to check on your status. You may be asked your proposal number, so keep that handy.

However, the easiest way to check your loan status with HDFC Bank is the bank’s loan status tracker. The tool is available on the bank’s website. You can simply enter your details such as your name, mobile number, date of birth or reference/ proposal number. Once you enter these details, you can submit and get the status of your loan. This facility is available for all kinds of loans of HDFC Bank.

 

HDFC Car Loan Customer Care


The HDFC Bank provides round-the-clock customer care facility for its loan customers. Not only is the customer care facility available 24x7, the bank’s loan facility is also available round-the-clock. Apart from that the bank has dedicated helplines for borrowers for every major city and state. The contact numbers for each of these cities and states are available on the bank’s website. The tollfree numbers help you register complaints and make other requests related to your loan account. Not just complaints, you can also call the customer care to ask queries about your loan, seek assistance and even give feedback about the bank’s service.

 

FAQs


Is it required to have a guarantor for the loan?


Not necessarily. In most cases the bank does not require a guarantor for the loan. However, if your income level does not meet the criteria of the bank, you may have to get a guarantor or co-applicant for your loan.

What are the documents required for a car loan?


You will need to submit an income proof, identity proof, age proof and address proof. As income proof you can submit three months’ salary slips or you income tax returns or your bank statements. As age and identity proof, you can submit Aadhaar Card, PAN Card, driving licence, voter’s ID and any other government identity proof. As your address proof you have to submit electricity/ gas/ telephone bill, Aadhaar Card, Voter’s ID, Ration Card or any other government address proof. If you are a self-employed proprietor or partner proprietor, you have to submit your audited statement as your income proof and your income tax returns.

How much can I borrow as a car loan from HDFC Bank?


You can borrow as much as three times your annual salary if you are a salaried individual. If you are a proprietor, you can borrow up to six times your annual income as loan. The bank disburses loans up to Rs3 crore on an array of models of cars available in the market.

What are the payback options for a car loan?


The loan is to be paid back on in equated monthly instalments or EMIs. You have to submit a few post-dated cheques and sign an ECS mandate in favour of the bank at the time of disbursing the loan. The EMI is debited from your bank account directly.

The HDFC Bank offers two EMI schemes by which you can pay your loan back. Through the Step Up EMI scheme you can keep increasing your EMI over the years as your income increases. This gives you the option to close your loan account sooner. Under the Balloon EMI scheme, you can choose to pay smaller EMIs for a longer duration and clear your balance by paying a large sum at the end of your tenure. You can also foreclose your loan account by paying the outstanding loan amount in total. A penalty may be levied. If you pay a part of your loan in a lumpsum at any given time, a penalty may be levied.

What is the importance of a collateral in a loan?


A collateral is required when you are taking a loan against your car. New car loans need not have a collateral as the cars being bought will act as collateral. In case of a loan against your car, you pledge the car as a collateral for loan. In case you default on the payment of the loan, the bank may seize the car. However, a collateral is not required for purchasing a new car using loan as the new vehicle will act as the collateral itself. SO if you default on the loan, the bank may seize your car.

What happens if I default on my EMI?


If you default on your loan or miss an EMI, the bank will charge a penalty to you every month. The HDFC Bank charges a 2 per cent overdue charge per month if your miss your payments or don’t make your payments on time.

Can I pay my outstanding all at once?


Yes, you can pay your outstanding all at once only after you have completed six months after availing the car loan. Foreclosure charges may be applicable on early closure depending on your scheme. If you close your loan account within a year after completing the seventh EMI, you will be charged 6 per cent on the principal outstanding. If the loan is closed within 13 and 24 months since the first EMI, a foreclosure chare of 5 per cent of the principal outstanding will be charged. If the loan account is closed after 24 months from the first EMI, a foreclosure charge of 3 per cent is levied.

Is it important to have a good credit score while applying for a car loan?


Yes, you must have a good credit score to be eligible to apply for a car loan. The credit score of an applicant is a measure for the bank to decide how well-deserving the candidate is for a loan. If you have a habit of maintaining your financials and meeting your financial commitments timely, you are less likely to default on a loan. Therefore you are a good candidate for a loan. A credit score above 750 is considered good enough for a car loan.

Does a car loan have any tax benefit for the borrower?


No. Tax benefits are available to borrowers on education loan and housing loan alone. There are no tax benefits on car loans.

What is the step up EMI scheme?


The HDC Bank offers a step-up plan that allows you to start repayment of your Car Loan with small EMIs and then gradually increase your EMI in future. This scheme is ideal for people whose incomes are likely to grow in the immediate future. The Step-up EMI scheme offered to an individual based on the assumption that an individual’s income grows over time and a car that may seem unaffordable now could be affordable next year. Using the Step-up EMI scheme, you can choose to take a higher loan amount but pay it back using smaller  EMIs. You can buy a bigger car in that case and increase your EMI as your income increases.

What is the Balloon EMI scheme?


The other custom-fit payback option that HDFC offers to its customers is the Balloon EMI scheme where you can pay lower EMIs throughout the tenure and a larger lump sum amount at the end of the term. With this scheme you can choose to own a bigger car at the cost of a smaller car. For example you take a loan for 60 months. Now, you can pay 60 per cent of your balance until the 59th month and pay 40 per cent of the outstanding in the 60th month.

How can I compare the best loan offers for a new car?


The HDFC Bank helps you compare, research and read reviews on new cars on its new tool the ‘New Car Bazaar/ Autopedia Mobile App’. You can search for cars by brands, prices and EMIs. The bank also provides you test drive assistance available on a wide range of cars for enabling to choose the right car for your needs. You can also visit third party websites to compare the cars and decide on a loan.

Does HDFC Bank provide insurance to cars bought with loan?


The HDFC Bank offers a comprehensive insurance tool called ‘Suraksha Kawach’ which offers protection to individuals against Permanent Total Disability, Accidental Death and Accidental Hospitalisation.

How do I know I am eligible for a car loan?


Before applying for a car loan, you can check if you are eligible for a loan. You can either visit an HDFC Bank branch and check you eligibility. Or you can check your eligibility instantly on the bank’s website. You can key in your details such as your employment status, total years of employment, your ITR details. The tool will tell you if you are eligible for a car loan and what is the amount that you are eligible to get.

How long does it take the bank to pass my loan?


The HDFC Bank can approve a car loan application within 10 minutes. If the documentation on your application is complete, you car loan application will be approved instantly. It will take around a week to disburse the funds in your account. If you are an existing HDFC Customer, you can get your loan funds credited to your account within seconds of getting an approval.

What are the features that decide the interest rate for a car loan?

The HDFC Bank decides what interest rate you have to pay based on your credit score, your income, your customer relationship with the bank and the car’s age and condition. If you have a credit score of 750 above, you will get a favourable interest rate. If your income is high, you are highly eligible for a car loan. The interest rate will also depend on your income. If you have a good track record with your bank in terms of other loans or other products, you are likely to get a discount on the interest rate. Because the car being purchased acts as s collateral against the loan, the make, age and condition of the car are very important in determining the interest rates. If you default on your loan, the bank may seize your car.
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First Published on Aug 7, 2019 07:58 am
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