Car finance allows the customer to buy the vehicle upfront and pay later, in equated monthly installments. The terms of a car loan also depend on various factors, including your income, credit score, and credit history. But Some brands and models of car are eligible for 100% financing – i.e. the bank will lend the entire cost of the car as the loan amount.

A car loan/car finance is a loan availed for:

• Buying a new car.
• Purchase a pre-owned car.

Key Features of Car Loan/Car finance:

Before choosing to take a car loan, you should have an idea of its most significant features. These pointers will help you know what you can expect to get with the car finance.

• A car loan helps you to finance the purchasing of a new or pre-owned car
• Financers usually lend up to 90%-75% for new and old cars respectively, the two types of car loans. (for some models upto 100% too) 
• The car loan tenure ranges from 1-7 years.
• The bank holds the car as collateral until the individual repays the loan
• The repayment is structured in equated monthly instalments or EMIs
• You can choose a suitable payment mode to repay the car loan. It could be through post-dated cheques or use an auto debit facility, through which the EMI will be directly deducted by the bank. Ensure sufficient funds are in your account to avoid default. 
• Car finance approval requires easy documentation checked by the lender and if they meet the lender’s expectations, and the loan is sanctioned. 
• Car owners can add accessories to their vehicles and this amount is included in the loan. 
• Borrowers can prepay the loan amount if they have the funds to prepay. The terms of pre-payment vary from lender to lender. Some car loan prepayments are charged by lenders while some do not charge anything if the first EMI is paid.

Eligibility for Car Loan:

Make that dream of owning your own car a reality with the Axis Bank New Car Loan. Find out about the New Car Loan eligibility criteria and documents required at the time of applying for the New Car Loan below.

Salaried individuals who are eligible for a car finance:

• Minimum 21 years of age
• Maximum 60 years of age at maturity (conditions apply)
• Minimum Net Annual Salary of Rs. 2,40,000 p.a. for all approved car models
• Income eligibility based on latest salary slip and Form 16
• Minimum of 1 year continuous employment

Self-employed individuals who are eligible for a car finance:

• Minimum 18 years of age
• Maximum 65 years of age at loan maturity
• Minimum Net Annual Business income of Rs. 1,80,000 p.a. for selected models and Rs. 2,00,000 p.a. for others
• Income eligibility based on latest Income Tax Returns
• Minimum 3 years of employment in the same line of business

Self-employed non-individuals who are eligible for a car loan:

• Minimum Net Annual Business income or Rs. 1,80,000 p.a. for selected models and Rs. 2,00,000 p.a. for others
• Income eligibility based on latest 2 years Income Tax Returns and audited financials of 2 years along with computation of income
• Minimum 3 years of employment in the same line of business

Priority / Wealth / Privee customers eligible for a car loan:

• Customers with a vintage of 6 months
• A minimum Average Quarterly Balance (AQB) as below:
  • An AQB of Rs. 1 Lakh for last 2 completed quarters. AQB requirement to be met for both the quarters
• Maximum loan amount restricted to 3 times the AQB in the last 2 quarters

Salary customers eligible for a car loan:

• Customers who have a Salary A/c with Axis Bank since the past 3 months
• Those who work with the following organisations:
  • Public Limited and Private Limited Companies
  • MNCs
  • Permanent employees of State / Central Government
  • Permanent employees of Public Sector Undertakings
  • Permanent employees of reputed schools / colleges
• Other factors
  • Minimum 21 years of age
  • Maximum 65 years of age at loan maturity
  • Minimum Net Annual Salary of Rs. 2,40,000 p.a.
  • Income eligibility base on latest salary slip and Form 16
  • Minimum 1 year of continuous employment

 Documents Required:

General Documents:

• Application Form
• Proforma Invoice
• Passport Size photograph of each applicant
• KYC Documents

Documents needed for car loans for salaried individuals 

As a salaried person, you receive a regular monthly payment from your employer. This stable income provides you with a significant advantage when it comes to securing auto loans. 

To ensure the approval of your auto loan application, you’ll need to provide the following essential vehicle loan documents:

• Most recent two months’ salary slips to demonstrate your income
• The latest form 16 or the most recent ITR. Form 16 is evidence that the employer has
  submitted the deducted TDS from the individual’s salary to the appropriate authorities
• Your bank statement showing the transactions of the past three months
• Proof of age can be furnished as a PAN Card, driver’s license, passport, or birth certificate
• Specific forms to verify your signature as part of your car loan application

Documents needed for financing a car for self-employed professionals 

If you are a self-employed individual, your income doesn’t come in the form of regular paychecks. Whether you run your own business or work as an independent contractor, your income can fluctuate from month to month.

Getting loan approvals from banks may be a bit more challenging for self-employed individuals compared to those with steady jobs.

To improve your chances of securing a car loan, here are the essential Car Loan documents you will need to provide:

• Utility bills like electricity or maintenance bills for the business location to show evidence of your business
• A copy of your business registration, like a GST certificate or an MSME certificate
• Current Account and Savings Account bank statements for the last three months
• Income tax returns for the past two years, an audited balance sheet, and a profit and loss statement to show proof of income

Documents required for car finance for self-employed non-professionals 

If you are a self-employed individual in the field of manufacturing, wholesale, trading, or retailing within the MSME category, you can apply for a car loan with minimal paperwork. 

Here is the list of Car Loan documents that you will need to provide:

• Audited balance sheet, a profit and loss (P&L) account, and your income tax return for the past two years as proof of income
• Bank statements for the last three months
• The Shop & Establishment Act certificate, MSME registration certificate, sales tax or VAT certificate, and the Current Account bank statement to confirm your business’s existence
• PAN Cards and an authority letter signed by all the partners for partnership firms
• In the case of a privately held company, a list of directors and the shareholding pattern. Additional documents for private limited companies can include PAN cards, a board resolution, and a certificate of commencement of business for limited.

What is the minimum CIBIL score for car loan?

The bank takes a holistic view of the car loan application. The CIBIL stand alone is not the criteria. However, a higher CIBIL score is considered good. The minimum cut-off for a CIBIL score is 701 at present.