All That You Should Know about Auto Loans
Almost everyone wishes to purchase a vehicle for themselves to use it for both personal and commercial requirements. Since the amount of money that you need to invest in the vehicle purchase is too high, you need to effectively manage the finances by availing effective loan credits from legible financing companies.
An auto loan helps you to purchase a 3-wheeler that costs more than you can buy with cash. If you take auto loans after proper research, then you can enjoy the following benefits from the same:
- You can spend less on your vehicle purchase.
- You can exchange your vehicle in a short span of time and afford a better version in the long run.
In this article, we have jotted down a checklist, which would be useful for applying for auto loan:
Eligibility Criteria and Documentation
If you are a salaried or self-employed individual, then you must pass through these eligibility criteria to get your auto loan approved instantly.
As a salaried individual, you should have an annual package of more than or equal to Rs.2 Lakh per annum to avail an auto loan in the range of 6-7 Lakh rupees with an affordable rate of interest. Individuals with better salary package can get auto loan approved with the higher loan amount and attractive loan rates.
The auto loan would be sanctioned only after you submit the necessary documents like salary slips, PAN card and local address proof to the loan financing company. In some rare cases, banks and other financial institutions might require a copy of your previous year’s income tax payment to process the loan.
Also, banks additionally check for the type of profession you are into as they want the individuals to hold a stable job throughout the loan tenure. You must also provide a profit after tax if you are working in a private company or firm. The chances for your auto loan getting approved are high only if the PAT (Profit After Tax) is more than INR 2 Lakhs. Additionally, the firm you are working for must show a minimum business stability of 3 years.
In short, the documents required for applying for the auto loan are:
- Proof of Identity: You can submit your driving license, passport or PAN card.
- Proof of Age: You must be of at least 21 years before you apply for the auto loan. Documents like school leaving certificate, passport and voter ID card would be enough to submit for the proof of age.
- Proof of Income: If you are a salaried employee, then you must submit ITR Form 16 as a proof of income. If you are a self-employed individual, ITRs or balance sheet would do. Also, you can submit the P&L sheets to get the loan sanctioned.
- Address Proof: For the proof of address, you need to submit Aadhar Card, Pan Card, Ration Card, or any other government ID proof that has your address on it.
- The other documents include your photograph with 2 signatures on the loan application form and bank statement as well. The documents requirement changes with the type of income you show to the financing company.
Make sure that you meet the eligibility criteria and have all the required documents mentioned above to get your auto loan approved. It might take some time to get the auto loan sanctioned, but once it is done, you can easily buy a 3-wheeler of your choice. If you are willing to buy a three-wheeler to start your business, then also you can avail auto loans to initiate the process.