For most people in India owning a car is a transformation from one giant leap of success .In current economic situation 80% of cars are financed in India.
The normal salaried or self employed customer understanding the car loan process makes life simpler and the makes easy on nerve while buying the car.
What are the steps involved in car loan process-
1. Identification of the Bank
There are many choices available and you see so many advertisements by various banks to give car loan. Just don’t follow the ads and try to research more to get the best lender.
While evaluating the bank-check Roi, Processing fee, Prepayment charges and the time taken to disburse the loan.
Also check with the bank, what are the formalities to take a loan. Dont just segregate banks into public sector v/s private, do a comparative check on all parameters.
For the bank to decide how much loan that it can give you, they have to check your income documents and would like to know your residence stability.
If your income is good enough after all your other loans emi- bank will be able to give emi of 50% of your net monthly income after Loans.
The documents that bank will collect are
Salary slip, Form 16, residence proof, Pan Card and your car booking slip.
3. After documentation, Bank will check your documents and do a verification at your home and office and will also doa cibil check on your other loans.
4. If all the above are positive , then the bank will approve the loan and ask the customer to sign the agreement and then will send the draft to the dealer.
The agreement must be read and signed only after reading all clauses.The agreement is always 20 pages and one should must read before signing at every page.
Also bank will get the registration of the car, hypothecation to its name so that it can take the car, if emi is not paid.
Banks also disburse loan after the car is insured and they have an insurance policy cover note.