If you are seeking to purchase a used car on loan, you will be well-advised to review all banks' latest loan offers and pick the one that ideally suits your needs Look for things like the provided interest rate, processing charge, pre-payment charges, overall amount, period of the loan, and so on. Remember that some lenders only provide such loans on used cars that are less than three years old and sometimes the maximum allowed term is 5 years, whereas some lenders provide such loans for a period up to 7 years. Because of the lockdowns due to COVID-19, the nation was restricted to its home for months in 2020, but sanity has now attempted to recover after the social pressures have relaxed. But, because of the lockdowns, if your attempts to purchase a car were postponed last year, you can now go forward and fulfill your objective.
The country, nevertheless, has yet to stabilize from the pandemic losses, with many still unsure about their financial prospects. In such a scenario, a good approach to improve our finances against potential risks may be to save as much cash as practicable by minimizing expenditures. Currently, perhaps one of the best cost-effective approaches to acquire a car, particularly if you can somehow also loan it from most lending institutions in the nation. Hence, if you are searching for a car loan below are the cheapest interest rates that are currently being offered by the top 20 banks of the country.
Banks That Provide The Cheapest Interest Rates On Car Loans
|Sr No.||Banks||ROI in % per annum|
|2||Bank of India||7.45|
|3||Punjab National Bank||8.30|
|4||Indian Overseas Bank||8.55|
|7||State Bank of India||9.20|
|8||Punjab & Sind Bank||9.85|
|9||Bank of Maharashtra||10.05|
|14||Jammu and Kashmir Bank Ltd.||11.95|
|16||Karur Vysya Bank||12.00|
|17||South Indian Bank||13.30|
Documents required to apply for a car loan
For a car loan application, multiple documents that define the required particulars such as your identity, proof of income and residence are needed. The records pertaining to new or used car, though, are the most relevant of all. The entire set of relevant car loan paperwork makes one qualify for the loan and one can not do so providing the necessary documents. While the criteria for paperwork varies from lender to lender, a list of documents generally needed when applying for a car loan is as follows:
- Application form properly signed and filled, accessible on the online platform or manually at the bank's branches.
- 2-4 recent passport size photographs
- Identity proof: Passport, Pan Card, Driving License, Voters ID card, Aadhaar card
- Address proof: Bank statement, Rent Agreement, Voters ID card, Ration card, Passport, Driving License, Utility bills, property tax proof.
- Age proof: Voter ID card, Birth certificate, Passport, Aadhaar card, Pension payment order
- Salary proof of the last 3 months
- Form 16
- Bank statement of the last 6 months
- Latest IT return proof
- Profit and loss statement
- Balance sheet
- PAN Card
- Vehicle information documents that may contain the retailer's sales records
- In consideration to confirm that, with respect to the purchased car, all relevant laws and guidelines are complied with, the purchaser must also submit copies of the Vehicle Motor Insurance and Driving License.
Eligibility criteria to apply for a car loan
A car loan in India can be applied for by almost anyone who satisfies the standard car loan eligibility requirements. The specific conditions for taking up any loan are determined by the car loan user's age, employment status and other personal considerations, together with, in addition, their repayment ability. For a person to be eligible for the authorization of a car loan, the standard criteria, regardless of the financial institution or loan amount, include:
- He or she must be a salaried or self-employed individual
- He or she must be an Indian resident or NRI
- He or she must have a minimum and maximum age limit of 21 to 65 years old(may vary from bank to bank).
- He or she must fit the minimum salary requirements of the bank lender
For data collection, interest rates on used car loans have been listed for all mentioned (BSE) public and private banks. There is no consideration for banks for which data is not accessible on their databases. Details obtained from the databases of the respective banks. On the basis of the lowest interest rate, banks are classified in increasing order. The table displays the lowest interest rate provided by banks on loans of up to Rs 5 lakh and for a period of up to 5 years. The interest rates referred to in the table are indicative and can differ based on the Terms & conditions of the bank.