Vehicles are a basic requirement for every person nowadays, be it for daily use or business purpose or as a source of employment for many people. Even though the price of vehicles varies based on the brand and its features, many people can afford to purchase them, but for people who have less funds, banks have auto loans scheme. This scheme is specially made for people who have insufficient funds for such an expensive purchase. Due to this scheme, people are able to gain employment by using the vehicle for commercial transportation while other can buy their dream cars and two-wheelers.
Requirements Of Lender:
Just like you evaluate the lending banks before going to get an auto loan, similarly, the lender evaluates and looks for certain specific requirements that you have to meet to qualify for the loan. The requirements or the details that will affect your qualification for auto loans are as follows:
- Your monthly income or revenue – To check if the applicant is capable of the repayment of the loan, his monthly income should not be less than or equal to the amount of instalments. The income should be double the instalment amount.
- Your personal information documents – For checking any past criminal history of the applicant, his documents are necessary so that lenders can trust the applicant will not create default in payment or commit fraud.
- Your CIBIL score – Credit Information Bureau (India) Limited score describes your credit history in 3 numbers based on your behaviour in repayment of loans over some time. This score is not only important for granting auto loans but is considered by every lending institution before granting a loan application. The credibility of an applicant is defined based on his CIBIL score.
- Your existing loans and EMIs – Some people have more than 1 loan at a time and the lending institution has to carefully examine and evaluate whether the applicant can handle paying 2 EMIs at once.
- The purpose for which vehicle will be used – Applicant may use the vehicle for personal purpose, commercial purpose or as a source of employment. The loan applicant has to clearly state the purpose for which the vehicle will be used.
It has become very convenient for people to own a vehicle now because of auto loans and it has become a source of employment because many loan applicants use the vehicles as taxis or work as transportation services for other people and businesses.