vehicle loan

Nowadays, a vehicle is necessary for everyone. For self-employed and salaried individuals in India, obtaining a vehicle loan is quite simple, but it might be challenging for those without a job. The most crucial need for acquiring a vehicle loan in India is proof of continuous income. In the end, the bank or other lender wants to be sure that you have a reliable source of income so you can make your loan repayments on time.


Indian Vehicle Loan Eligibility

Vehicle loan criteria varies from lender to lender in India. In general, banks require more stringent qualifications than NBFCs and other online lenders. The following are the crucial elements for car loans in India:


The applicant’s age must fall between 21 and 65.

You must have a reliable source of income.

an excellent credit rating

keep a steady job

In India, unemployed persons can obtain vehicle financing from banks, NBFCs, and car dealerships to purchase the new or used vehicle of their choosing. Here are several ways an unemployed individual can get a car loan:


Display a different source of income

Some lenders may allow your application for a vehicle loan if you have an additional source of income, such as a pension, disability income, interest from a fixed deposit (FD), or a return on investment.


Opt for a car loan against FD

It’s a popular way for unemployed people to get a vehicle loan. You can use your Fixed Deposit (FD) as collateral to get a loan if you have one with the bank. The lender interprets this as an OD (Overdraft) on your FD and approves the loan. If you have a joint FD, you must obtain the co-written holder’s approval before applying for a loan.


Get a co-signer

Lenders may approve your auto loan application if you have a cosigner with a solid credit score and a stable income who can serve as security/guarantee. The co-applicant is held liable if you are unable to make your loan installments on time.


Therefore, make sure you clearly explain the scenario to the co-applicant before getting them on board.


Make a sizable down payment.

Your chances of obtaining a car loan can be increased by making a sizable down payment on the car of your choice. A sizable down payment could minimise the total cost of your auto loan. If you can come up with a sizable down payment, the lender might be more inclined to approve your car loan even if you don’t have a steady source of income.


Choose a loan secured by an automobile.

If you currently own a car, you are eligible to apply for a loan against it. You use your old car as collateral in this case to obtain a car loan. Vehicle loan terms typically range from one to three years, with annual percentage rates of 14% to 20%. When you apply for a loan against your current car (the one you’re using as collateral), you can borrow up to 150 percent of its market value.


Take out a mortgage against a car.


Putting up your loan against property or gold as collateral for a car loan that you may use to purchase any new or used car of your choice is another way to get auto financing. However, keep in mind that the lender may seize your property as payment if you don’t make your loan EMI payments on time.


Finding a car loan while unemployed requires time and research. Expect to put down more money and pay a higher interest rate if you can’t provide any documentation of your work.

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