There are umpteen reasons why taking a car loan will help you not only lessen your immediate financial condition but also makes it easier for you to avail of bigger loans in the future!
Eligibility Criteria for a Car Loan
Different banks have their own specific set of rules, but some criteria are universal and mandatory.
The person applying for the car loan should be at least 18 years. (Central Bank Of India offers a car loan to 18-year-olds) Although, most banks only provide or approve a loan to people who are 21 years and above.
The maximum age limit to avail of a loan also varies from bank to bank. Still, according to a general consensus, a person can apply for a loan up until they are 60 (salaried) and 65 (self-employed.)
The person should be earning at least 10,000 every month, and they either have to work for 2-3 years or should be self-employed for the same amount of time.
The Documents Required to Take a Car Loan
- ID proof such as Aadhar Card, Pan Card, Driving License
- Address Proof
- Three months salary slip
- Past 6 months bank statement
- Recent Photographs
Why you should take a car loan
Here are some of the reasons why you should consider taking out a car loan to buy your dream car:-
Paying an EMI is Much Easier
Paying an EMI reduces your financial burden to a significant extent. However, it will be absolutely disastrous for your pocket to lose all that money at once. So instead, you can pay back the EMIs in smaller portions in accordance with your monthly budget. To make your own calculations, use an online EMI calculator.
Improve your Credit Score
Taking a car loan and paying the EMIs back timely can tremendously affect your credit history. The punctual payments of your loan will lead to a good credit score. You will find it simpler to apply for additional loans in the future, even bigger loans like mortgages if you have an excellent credit score.
You Can Invest in Other Endeavours
When you save money by taking a loan as you don’t have to pay the full amount upfront, you get the opportunity to invest the money that you saved up in hybrid mutual funds or other similar ventures.
No Need for a Collateral
Since this loan only intends to buy a car, there is no requirement for any additional collateral. The only conditions that the loan implies are regular payments, and the car purchased acts as collateral in case of failure of payments.
Conclusion
To conclude, taking a car loan lightens your financial burden but also gives you the opportunity to build a great credit score and invest in better financial endeavours. All you need to do is do some market research and prepare all the documents that you need to avail a car loan. So, if you have been contemplating getting a car, now is the time!
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