A car loan is a borrowing instrument that a lender such as we provides an individual allowing him/her to purchase a car. Car loans have gained popularity in recent times as instead of being a luxury item or a symbol of status, cars have grown to become an essential commodity for the continuously growing middle class of India. With the increased popularity of car loans, most banks and NBFCs currently offer this type of loan to individuals who have a good credit history. One point to keep in mind regarding a car loan is the fact that this loan invests in a depreciating asset i.e. the asset (car) bought using this loan is in fact going to cost less over time.

Yes, car loan is offered for pre-used cars. But, the interest rate for such a loan would differ from that of a new car. However, the loan would only cover the price of the car itself, other costs as transfer of registration, etc. will have to borne by you.

Just as the name suggests, a car loan is a loan granted to an individual interested in buying a car. Therefore a car loan is a secured loan where the car you buy acts as a collateral. Therefore, there is no additional collateral requirement for a car loan. However, you do have to get the RC (registration certificate) of the car endorsed with the bank. This endorsement is cancelled after repayment of the loan is completed.

The maximum loan amount approved will be dependent on applicant’s profile. Maximum amount of financing offered depends on the price, type of car (standard/ premium) and whether you are applying for a new or pre-owned car.

Like any other loan that you apply for, a car loan application requires self attested supporting documents such as income (last three pay slips/last acknowledged ITR), address and identity proof documents along with you PAN card. Other documentation requirements, if any, tend to differ from profile to profile. car loan application

The tenure of a car loan ranges from 1 year to 5 years. The shorter the loan tenure, the higher is the EMI payable and the reverse is true for longer car loan tenures.

Yes, that is Rs 25000 per month (min).

A loan guarantor or a co-borrower is only required if you are unable to meet the eligibility criteria stated by the NextFin such as monthly income, age or credit score. Otherwise you can apply for a car loan on your own.

Your loan application may be rejected if you have a bad credit score, have defaulted on your repayments or applied for and been rejected for loans multiple times, etc. Also, you should meet the bank’s eligibility criteria such as minimum income level, age, previous relationship with the bank, etc. to get your loan approved.

Yes, you can negotiate the interest rate applicable to your car loan by leveraging your credit history and prior relationship with the prospective lender. The regular payment of EMIs for previous loan/credit cards you had/have with your prospective lender can fetch you a car loan at a preferred (lower) interest rate.

No. the car to be sold to a new owner when the loan has been paid off in full. This is because, you need to a get a NOC from the NextFin before you can sell your car and the document is released only after you have paid off the car loan in full.

Repayment of loan can be done through post dated cheques (PDC) provided by you to your lender when signing up for the car loan. The other option is an auto debit facility where the EMI is automatically debited from your savings account after you have provided an ECS (Electronic Clearing Service) mandate to the lender.

Generally, lender treat you as a defaulter if you fail to pay two or more EMIs in a timely manner. You will initially be charged a penalty fee and asked to regularize your payments. If you fail to regularize your payments after repeated notifications, the financial institution can legally repossess your vehicle. Subsequently, your credit score will also take a hit and in the future, you will face complications in future loan approvals.

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