1. What are the different car loan products I can avail?
    You can avail a car loan to buy a new car or a used car. You may also avail the refinance options wherein you can get a loan against your existing car. In addition to these, there are top-up options wherein you can enhance the loan amount on your existing car loans or refinances.
  2. Who can avail a car loan?
    A car loan can be availed by individuals who are Indian citizens, proprietorships, partnership firms, private limited companies, public limited companies and trusts registered in India, provided they satisfy the other eligibility requirements which vary from one bank to another.
  3. I am a Non Resident Indian (NRI). Can I avail a car loan?
    Yes, there are banks that provide car loans for NRIs. Please refer to the NRI car loans page for more information on the same.
  4. Is there any age limit for availing a car loan?
    For most banks, the minimum age for availing a car loan individually is 21 years, though anyone above 18 years can avail the same by attaching a co-borrower.

    The maximum age for availing a car loan for a salaried person is 58 years or age of retirement whichever is higher. The same for a self-employed person is 65 years. The maximum age limit pertains to the age of the person when the loan matures. In case of people with age higher than the stated maximum, the loan can be still availed by attaching a co-borrower who is eligible under these norms.
  5. I do not have proper proof of income, would I still be able to get a car loan?
    Normally proof of income is a must for availing a car loan. In cases where income proof is not available, there is an option of doing the loan through BOP (Banking and Own-house Proof) scheme, wherein the customer can provide the details about his banking account transactions and house ownership proofs. But the funding (loan amount to car value) provided would be lesser in this case.

    The same may not be possible in case the vehicle bought is an MUV or a SUV. In such cases, BOP along with previous auto loan repayment track record may be considered.
  6. Can a car loan be availed based on the existing payment track record against another loan availed earlier?
    The repayment track record against an existing personal loan or auto loan can be used to avail a car loan. The track record against a home loan is normally not taken into account by banks.
  7. Can I avail a car loan against my fixed deposits?
    Most banks do not have a provision for the same. But, some banks do allow this, in case the fixed deposits are also with the same bank.
  8. How would the eligibility for a car loan be calculated?
    Eligibility for a car loan is calculated against the ex-showroom price (and not the on-road price) of the vehicle and loan amounts can vary from 50% to even 100% of ex-showroom value.

    The large variation in the eligibility is derived from the income profile of the customer, category of the vehicle and tenure for which the loan is applied for. In case of used cars, this would also depend on the resale value of the vehicle.
  9. Can the cost of accessories be covered as part of the loan?
    No, the loan amount would be only against the ex-showroom price of the vehicle. Cost of accessories would not be covered under the same.
  10. Can I avail the loan under my name but register the vehicle under my parent's / spouse's / children's name?
    No, registration of vehicle and the car loan would be in the name of your parent/ spouse/ children. You can act only as a co-borrower.
  1. What are the prevailing interest rates on a car loan?
    Interest rate on a car loan varies depending on the bank. Interest rate on a loan also depends on the category of the vehicle and the tenure for which the loan is applied. Hence the interest rate offered need not remain the same for all loans provided by a single bank. For rates prevailing in the markets now, please refer to the comparison table.
  2. Would the interest rate differ depending on whether I am purchasing a new or pre-owned car?
    Yes, the interest rates for the loan are different for new and pre-owned cars. The rates on loans availed to buy a pre-owned car are normally higher than the ones availed to buy a new car.
  3. There are several terms like 'fixed/ floating', 'flat/ diminishing' making rounds in the market in relation to the interest rates. What do these terms mean?
    Normally the rates quoted on car loans are monthly diminishing in nature, wherein the interest to be paid is calculated based on the outstanding principal for the month.

    And usually car loans come with fixed diminishing rate schemes only. Floating rate schemes, where the rate of interest changes based on the market conditions are more common in housing loans.
  4. What are the charges levied on a car loan?
    Normally the processing fee and the interest are the only charges levied on a car loan when getting a new car. In case of used cars, there can also be a valuation fee and RTO charges in addition to these.
  5. What are the possible tenure options available for a car loan?
    Normally the tenure for a car loan varies from 1 to 5 years. There can be exceptions though where some banks do limited period offers allowing the loan to be repaid over 7 years.
  6. How long does it take to process a car loan?
    It would take around 3 to 4 days normally to process a car loan, when there are no hiccups.
    Loan gets processed the quickest when all required documents are provided properly at one go.
  7. What are the documents required to get a car loan?
    Documents usually required for an Individual to get a car loan are as below.
    • KYC documents
      • Identity proof
      • Address proof
      • Date of birth proof
      • Signature proof
    • 6 months bank statement
    • Passport size photograph
    • Latest 2 years IT returns with computation (in case of self-employed persons)
    • Latest 2 years form 16 and 3 months pay-slip (in case of salaried persons)
    Documents usually required for a private limited company/ public limited Company/ partnership firm to get a car loan are as below.
    • Board resolution/ Letter of authority
    • Copy of article of association/ partnership deed/ MOA
    • Six months company bank statements
    • Latest two year audited company financial statements
    • KYC of authorized signatory
      • ID proof
      • Address proof
      • DOB proof
      • Signature proof
    There may be more documents needed on a case-to-case basis depending on the bank and the scheme opted for.
  8. Why do banks ask for cheques when the repayment is carried out through ECS? How many such cheques are needed?
    Banks insist on cheques to be collected from borrowers for security purposes. These cheques are utilized in case there is a problem with clearance for ECS.

    The number of cheques required varies depending on the bank and ranges from 3 to 10, depending on various parameters. Apart from these, a cancelled cheque may also be needed to authorize ECS payments.
  9. Can I pre-close a loan earlier than planned? Are there any penalties applicable for the same?
    Yes, you can pre-close a car loan after a minimum of 6 months with most banks. Closure charges vary from bank to bank and in some cases vary based on the time of closure. To get the exact details on the same, please refer to the comparison table.
  10. Is it possible to make part-payments against a car loan?
    Part payments are normally not allowed in case of car loans though there are a few banks which do allow the same.
  1. What will be the mode of repayment for my car loan?
    In case the loan and the account from which the loan would be repaid are with the same bank, then the bank would take a standing instruction. In case these are at different banks, then the payments can be made either through ECS or through post dated cheques (PDCs). In case of ECS, security cheques are required.
  2. In whose name would the payment of the loan be released?
    On completion of all formalities, the payment would be released in favour of the showroom finalized by the customer for the purchase of the vehicle, in case it is a new car. In case of pre-owned cars, the payment would be released in favour of the dealer or person selling the car.
  3. Would I get the original registration certificate in case I avail a loan? When would I get the same?
    Yes, you would get the original registration certificate in your name even when your vehicle is bought through a loan. But, the registration certificate would contain the details about the vehicle being hypothecated against the bank.

    The registration certificate would reach you within a month, through the showroom, which sold the vehicle.
  4. When / How would the hypothecation of the vehicle be cancelled?
    On maturity or foreclosure of the loan, the financier would issue form 35 and NOC, which would have to be taken to the RTO for cancellation of the hypothecation.
  5. What would be the date of payment of EMI?
    The date of EMI payment varies based on the financier. For exact details, please refer to the comparison table.
  6. What happens if an ECS payment against my loan bounces?
    In case of a bounce, most banks charge a penalty of Rs. 500. And in most cases, it gets presented for a second clearance in the same account. In any case, it would be prudent on your part to get in touch with the bank to discuss the possible course of action to ensure a clean credit history.
  7. Is it possible to transfer a car loan from one bank to another? Are there any charges applicable while doing the same?
    Yes, it is possible to transfer a car loan. But pre-closure charges might be applicable while doing the same.
  8. Can you help me to exchange my vehicle with a new one?
    Yes, RupeeZone will be able to close any loans on your existing vehicle by dealing with the vendor directly and utilize the remaining amount towards the purchase of your newer vehicle. In case you want to go for a newer loan to aid in the purchase of the newer vehicle that can also be handled by us. That is why we call RupeeZone the one stop shop for all your car needs!
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RupeeZone is a division of T.S.Mahalingam & Sons, pioneers and market leaders in the pre-owned cars business. For RupeeZone, arranging for car loans is but a natural extension of our pre-owned cars business. Your dedicated RupeeZone expert will get you the best rate loans in the quickest possible time. Not just that, he will also help you with all your car needs - be it choosing the right car, buying/selling/exchanging a pre-owned car or getting a car insurance.

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