Buying a car means independence for some people, while lifestyle growth for others. It was once a luxury for only the rich but has now become a necessity for all. Irrespective of your income, you can enjoy the comfort and freedom of being a car owner. With a certain amount kept aside from your savings and a car loan, you can convert the dream of buying a car into reality.
In general, the process of borrowing a car loan from reputable banks is almost the same. However, not everyone gets their loan application approved as expected. It is because banks first check if an individual can repay the loan amount they wish to borrow. At the bank’s end, the process is quite streamlined and does not take much time. However, some hurdles can cause unexpected delays or even rejection of a car loan application.
To prevent this from happening when you apply for a car loan, here’s what you should do:
- Maintain a Good Credit Score
A credit score, also known as CIBIL score, is the measure of your creditworthiness to lenders. They assess it to check your repayment capability before offering a car loan. It also means you must fetch your current credit score, which can be any three-digit number as determined by credit bureaus in India. The higher your score is, the faster the processing will be for your car loan application.
Furthermore, if it turns out that your credit score is low, you must take the right steps to ameliorate it, like repaying your existing loans or credit card bills on time. As a rule of thumb, avoid applying for a car loan if your score is below 700.
2. Keep the Required Documents Handy
Another cause of delays in the approval of car loan application is not having the required documents when asked for. At times, many people look forward to arranging the documents at the last moment. For instance, if you live in a rented home, getting an authorized rent agreement made may take a lot of time.
As a part of the application, you need to submit various documents that serve as proof of your identity, residence, and income. These include Aadhar card, PAN card, and bank statement/salary slips as income proofs. Before you apply for a car loan, make sure you have these documents handy.
3. Set an Amount for Down Payment Aside
A down payment is a minimum amount that a bank wants you to pay while buying a car while the rest is covered under the car loan. In general, you must have saved around 10% of the car’s value to be given as a down payment. Failing to do so may cause an unexpected delay in getting your car loan application approved. Or alternatively, choose a car for which you can pay a down payment of around 10% easily without facing a financial burden.
You must also know that opting for a higher down payment while buying a car can lower down the loan EMIs. Thus, it is crucial to maintain a balance amongst your regular expenses and existing financial liabilities.
4. Borrow a Loan from a Renowned Bank
At its core, the car loan approval process is a part of a bank’s customer support services. Selecting a renowned bank like Axis Bank to borrow a car loan implies that you will get active support from their concerned team whenever you need it. Also, you may get an instant approval for a car loan based on your banking history and creditworthiness. If you already have an Axis Bank savings account, access the online user account to check if you have an instant car loan offer.
When you have plans to finance a new car via car loan, it is crucial to do a thorough research on loan approval standards. This way, you can increase the possibility of availing a car loan without hassle.