finance : Introduction
Financing a car involves borrowing money from a lender to buy a vehicle, where the car is used as an asset. You can obtain financing through banks, credit unions, dealerships or online lenders. The amount, interest rate and duration are important factors to consider when choosing financing options.
What is Car Financing?
The car loan or auto loan is taken from a bank or financial institution specifically to buy a car. In this scenario, the car dealer is paid an advance by the lender, and the lender is expected to pay the full loan amount along with applicable interest and fees to the lender.
Some information is given below which after understanding it you can decide how can you finance a car. So take a look at it and fulfill your goal.
Types of Car Financing Options
a.Bank Loans
b. NBFCs (Non-Banking Financial Companies)
c. Dealer Financing
d. Credit Union Loans (if relevant in your region)
e. Personal Loans vs Car Loan
Eligibility and Documentation
Eligibility Criteria
| Criteria | Details |
|---|---|
| Age | Minimum 18 years (some lenders may require 21+); upper limit depends on loan tenure |
| Nationality | Must be a resident Indian |
| Income | Salaried: Minimum monthly salary (varies) Self-Employed: Minimum annual income or turnover |
| Employment | Salaried: Stable job, minimum tenure with current employer Self-Employed: Business proof and income docs required |
| Credit Score | A credit score of 700 or above is usually preferred |
📝 Documentation Requirements
| Document Type | Examples / Accepted Proofs |
|---|---|
| ID & Age Proof | PAN Card, Aadhaar Card, Passport, Driving License, Voter ID |
| Address Proof | Passport, Voter ID, Driving License, Utility Bills, Bank Passbook, Registered Rent Agreement |
| Income Proof | Salaried: Salary slips, Form 16, ITRs Self-Employed: ITRs, Balance Sheets, P&L Statements |
| Bank Statements | Recent bank statements (usually for the last 6 months) |
| Other Documents | Business registration, partnership deed, GST certificate (as applicable) |
Interest Rates and Loan Tenure
The calculator will then instantly display your precise monthly EMI amount, allowing you to effectively budget for the long term. Estimating your EMI with a home loan EMI calculator is crucial for any prospective borrower. The calculator will then instantly display your precise monthly EMI amount, allowing you to effectively budget for the long term. Estimating your EMI with a home loan EMI calculator is crucial for any prospective borrower. Calculating Your EMI