The documents you need to get a car loan

In order to qualify for various types of loans, banks require specific documents from their customers. In this article, we discuss the types of documents you'll need to apply for a car loan in India, as well as the application process. We will explain to you what three major types of car loans are offered by banks in India and why they are important.

Which documents are required for a Car Loan?

To process your Car Loan application with IDFC FIRST Bank, you must submit the following documentation:

· Identity proof (PAN card, Aadhaar card, Passport, or Voter ID)

· Address proof (Aadhaar card, Driving License, or Passport)

· Income proofs (current salary slips, latest Form 16, current ITR)

· Latest 6 months’ bank statements

· New car dealer documents (Proforma invoice, Insurance, Margin money, or Tax invoice)

However, if you are applying for a pre-owned car loan offered by IDFC FIRST Bank, you must provide the following documents:

· Valid Identity Proof (Aadhaar card, passport, voter ID)

· Address proof (Aadhaar card, driving license, passport, voter ID)

· Income proofs (Salary slips of the last 3 months, Form 16 for the last 2 years, ITR for the last 2 years)

· Latest 3 to 6 months back statements

· RC book and insurance copy of the vehicle 

The documents required for a car loan are generally divided into six categories. Here is a list of these categories and the types of documents they contain:

1. Identity proof:  Includes your Aadhaar card, PAN card, driving license, passport, and voter ID.

2. Address proof: Documents such as your Aadhaar card, passport, driving license, voter ID, family card, utility bill, and life insurance policy are considered address proof.

3. Age proof: Any of the following documents qualify as age proof – birth certificate, school transfer certificate, 10th standard mark sheet, and Aadhaar card.

4. Proof of income for a car loan: Your salary slips for the past 3 months and a Form 16 income tax return document can be considered proof of income.

5. Bank statement signature verification: You must also submit bank statements dating back to 3-6 months as documents required for a car loan.

6. Vehicle loan agreement: The final category within the documents required for a car loan is a vehicle loan agreement. This agreement helps the bank know the dealer-quoted price of the car selected by the applicant.

What is the car loan application procedure?
 

Here is how any IDFC FIRST Bank customer can avail a car loan with an EMI (Equated Monthly Instalment) value that is 50% lower than other car loans combined with an extended loan tenure of up to 10 years:

· Visit the IDFC FIRST Bank site for car loans.

· Click on “Apply Now”.

· Enter your personal details and click on the "Submit" button. You will receive a call from an IDFC FIRST Bank representative in 24 hours.

· If you do not receive a call, you can give a missed call to the number 8448986445 to receive a call from IDFC FIRST Bank’s representative.

What are the types of car loans available in India?
 

There are generally three types of car loans in India – “new car loans”, “used car loans”, and “loans against cars”. Let us understand these three categories of loans:

New car loans:

A “new car loan” is a type of car loan that helps customers purchase a brand-new car. Generally, banks offer new car loans at an interest rate of 9-14%. IDFC FIRST Bank offers a competitive new car loan interest rate with a hassle-free loan application process and a loan tenure of up to 10 years.

Used car loans:
 

IDFC FIRST Bank’s instant pre-owned car loans with minimal documentation fall under this category. Re-purchase loans can have a loan tenure of up to 7 years. IDFC FIRST Bank also offers a Loan to Value ratio (LTV) of 200% of the car's market value. The LTV value of a car loan is defined as the ratio of the loan amount to the market value of the car.

Loan against the car:
 

The third category of car loans – loan against the car – is the facility of pledging one’s old car as collateral to receive a loan amount which can be used for personal expenses. This category of car loans is offered by IDFC FIRST Bank too. IDFC FIRST Bank offers loan tenures of up to 60 months on loans against cars.

Your choice of car loan will therefore depend on whether or not you already own a car, if you can finance the purchase of your new car, and whether or not you wish to purchase a brand-new or used car.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.