A car loan is one of the popular loans given online these days. The lender finances purchase of a car through this loan and the car purchased is the collateral for the loan. Lenders generally give out between 65% to 80% of the value of the car as a loan.
If you want to apply for car loan, one of the important things you need to do is check the eligibility criteria for the loan. Each lender has their own eligibility criteria for the loan which is displayed on their website. The lender will only approve the loan application if you meet their eligibility criteria.
Here are the eligibility criteria for car loan:
1. Age is an important eligibility criteria for lenders. Most lenders have a minimum age of 21 years and a maximum age of 60 to 65 years. One condition that some lenders place is that the maximum age of the applicant must not cross 65 years when the loan is unpaid.
2. A minimum period of employment or self employment between 1 to 2 years is necessary to show some form of stable income that can repay the loan. Some lenders may specify the type of companies whose employees they will lend to.
3. A minimum monthly income is generally specified between the range of Rs. 20,000 to Rs. 50,000 depending on the lender. This includes all types of income, including investment income and rental income.
4. A minimum yearly income or profit from business has to be shown. In case the yearly income is not adequate, you can opt for a joint loan application. In a joint loan application, the incomes of both the loan applicants are considered for the purpose of car loan eligibility. When you do a joint loan application, the repayment risk is also split between the joint loan applicants.
5. Though this criteria is not clearly specified, but lenders also check the credit score of the individual to get the repayment history. When you make a loan application, the lender makes a hard pull request for your credit information. This hard pull shows in your credit information report. This is why you need to be careful how many car loan applications you make & calculate your monthly EMI using EMI Calculator for Car Loan.
Apart from checking the eligibility criteria online, you can use a car loan eligibility calculator to find out how much loan amount you are eligible for based on your personal and income information. This calculator is available for free on lender websites. Some lenders combine it with a car loan EMI calculator which will help you find out the monthly instalment amount from your car loan.