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Are you eligible for getting a car loan in India?
There are several banks in India, which provide auto loans at attractive interest rates, but before applying for a car loan in India, you need to know about whether you are eligible for an auto loan or not. So below are a few common tips to note before buying your car with loan in India.
- Most banks in India whether they are public sector banks like State Bank of India or Punjab National Bank or private players like ICICI bank, Citibank, or HDFC bank have mostly same eligibility criteria.
- Banks provide car finance to salaried individuals working in a private or public limited company and also to self-employed individuals who run their own business.
- Whichever is the bank you are getting a car loan from, the most important criteria for getting the amount on your car finance depends on your income and credit rating.
- According to the guidelines served by Reserve Bank of India, a salaried class car loan applicant in India should have completed 25 years of age at the time of loan application and should be not more than 58-year-old at the time of loan maturity.
Car Loan Age Criteria
At Time of Loan Application
At time of Loan Maturity
Not less than 25 years of age
Not more than 58 years of age
Not less than 28 years of age
Not more than 65 years of age
- In case a car loan applicant is a proprietor of self-owned business, a freelance professional, or managing director of the company, the age should be above 28 years at the time of loan application and below 65 years of age at the time of maturity of loan.
- Limited companies applying for a car loan are only eligible if they have been in existence for at least a three-year period and have all the documentation including income tax returns and financial statements required for the loan approval, sanction, and disbursal.
- Regarding income criteria, a standard nationalized and private bank in India requires its car loan applications to have total annual income of not less than 2 lakhs 50 thousands INR.
SBI Auto Loan Commercial
- For private limited firms, the minimum profit after tax should 2 lakhs INR to be eligible for a car loan.
- Regarding stability of employment, total employment stability of a car loan applicant for Indian banks should be more than two years and a minimum of 1 year. Regarding stability of business, it should be not less than 3 years.
The above eligibility criteria for getting a car loan is a common procedure followed by different banks of India but still some banks may have slightly different provisions or regulations provided by RBI, so you need to check with the bank regarding their specific criteria, so go ahead and get your car loan and buy your dream car.