A few years ago, owning a car was more of a luxury and aspiration. Today, it is a necessity in most of our lives. The growth in disposable income, current low interest rates and the ease of commute it brings along, adds to the umpteen reasons India is witnessing a surplus of car purchases and loans. If you are one of those who are looking for easy car loans, but aren’t sure if you are eligible for one, then read along to get a quick gist about it all.
Here are top 5 factors that are taken into consideration during your traditional car loan processing.
A credit score, also known as a cibil score, is a three-digit summary of your credit history. Your repayment capacity and behavior for your previous debts are assessed by lenders through your credit score. A credit score above 750, classifies you to be a responsible customer when it’s about repaying your loan on time, and hence, ensures a quick and smooth loan application. However, if your previous payment patterns have been irregular, be it for a valid reason, you are likely to have issues for your loan approval from almost all banks.
EMPLOYMENT STATUS AND INCOME
Some of the factors such as good income, profession of the applicant, age, etc. are taken into account to signify his/her eligibility. A salaried applicant should have a minimum of 1 year experience in the current organization, whereas a self-employed applicant should’ve been in the same business for a minimum period of 2 to 3 years. The lender assesses your income and spending patterns to check if you would be able to pay the EMIs on time. Applicants with a high income tend to get a high loan amount with better EMI schemes, whereas a low-income applicant may get a low loan amount and limited benefits.
The type of car that you wish to buy will determine your car loan eligibility. The model, make and the status of the car (pre-owned/new) would play an important role on the loan cap given to the applicant. Since a car is an asset whose value depreciates with time, a pre-owned car may not be entirely financed, whereas you may get a better cap for the purchase of a new car.
BACKGROUND CHECK OF APPLICANT
Previous loans, history, residence, constant flow of income, profession and a whole lot more are researched and collected about the applicant to avoid future hassles. Although it is a necessity, many applicants get filtered out because of low income, previous delays in the payment of EMIs or rented residence proof.
PERSONAL CONTACT WITH LENDER
A personal connect with a lender or an employee at the bank can help you negotiate, and get a higher loan amount approved at a lower rate. They may also cut down on the number of visits to the bank or help you with the lengthy paperwork involved in the physical loan process.
We, at Kuwy, consider that automotive loans are more than just lending, they are the key to your dreams. We understand the need of our customers, be it low-income professionals or those with a tricky cibil score, which is why Kuwy has a loan for every customer. Download the Kuwy app and skip the lengthy paperwork of your traditional loan process with the future of automotive finance.