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How Car Loans Work in India and Car Loan Process

Posted by Admin

Car loans are among the most demanding financial products in India from last 10 years and the trend of availing car loans is increasing tremendously day by day. A number of financial firms and private sector banks in India have giving their focus on the auto loan sector for generating their business.
In current economic situation 80% of cars are financed in India. The normal salaried or self employed customer understanding that the car loan makes life simpler and it makes easy on nerve while buying the car.

Here is a step by step break-up of the car loan application process:

Step 1: Enquiry with a lender

The first step is to get in touch with car loan agent like You need to get in touch with as many lenders as possible and get them to make loan offers to you. Your loan agent will help you to contact and provide offers of all the lenders and also negotiate with them to get the best interest rate. Check if there are any special offers.
After you have got all the banks to make their offers to you, select your lender based on the information you have in front of you.

Step 2: Documents Collection
After selecting and finalizing your lender, the lender’s selling agent will visit you and collect documents supporting proof of income, residence proof, and identity. You may be required to produce copies of IT returns, salary slips, bank statements, passport, driving license, and other relevant documents. Your agent will help you in case of shortage of any document because required documents vary from lender to lender.

Step 3: Loan approval
If the bank finds all the document valid and find the borrower to be capable of paying the loan EMIs on time, they will approve the loan amount within a short duration of 2 days.

Step 4: Loan disbursal
The lender then disburses the amount through cheques or demand drafts (DD).