Car Loan Eligibility Criteria
Wondering about your car loan eligibility and what to do to increase your chances of approval? BankBazaar gives you all the information you require on car loan eligibility from top banks.
Get a reliable guide to choosing the right car loan for you so that you can make the right choice and apply for the right car loan right now.
Your eligibility for a car loan will vary from lender to lender but many of the lenders will look for the below-given criteria:
Particulars | Details |
Minimum Age of the Applicant | 18 years |
Maximum Age of the Applicant | 60 years for salaried applicants and 65 years for self-employed applicants |
Minimum Annual Income | Rs.3 lakh |
Car Model | Any approved car model |
Type of Employment | Salaried or self-employed |
Country or Place of Residence | India (rural/semi-urban/urban areas) |
Duration of Stay in Current Residence | A minimum of 1 year |
Car Loan Eligibility Calculator
Note: Loan eligibility criteria differ depending on a bank/lender. Approvals are based on borrowers' incomes, credit profile and existing relationship with the bank.
Car Loan Eligibility Criteria for Top Banks
While applying for a new car loan, you will need to meet certain eligibility criteria and these requirements can differ from lender to lender. Let us take a look at the requirements for some of the top lenders:
Axis Bank Car Loan Eligibility
Salaried Individuals | ||
Minimum Age | 21 years | |
Maximum Age | 60 years at the time of loan maturity | |
Minimum Annual Income | Rs.2.4 lakh | |
Employment Status | Should be in continuous employment for at least 1 year | |
Other Criteria | Should be able to produce Form 16 and latest salary slip to prove income eligibility | |
Who is Eligible? |
| |
Self-Employed Individuals | ||
Minimum Age | 18 years | |
Maximum Age | 65 years at the time of loan maturity | |
Minimum Annual Income | Rs.1.8 lakh - Rs.2 lakh | |
Employment/Business Status | Should be in the same line of business for at least 3 years | |
Other Criteria | Should be able to produce latest Income Tax Returns to prove income eligibility | |
State Bank of India Car Loan Eligibility
Category | Minimum Income Criteria | Maximum Loan Amount | Age Criteria |
Employees of central and state government, public sector undertakings (PSUs), private companies, reputed establishments | Rs.3 lakh p.a. | 48 times of the net monthly income | 21 years to 70 years |
Self-employed professionals, businessman, partnership/proprietary firms | Rs.3 lakh p.a. | 4 times gross taxable income or net profit | 21 years to 70 years |
Individuals involved in agricultural and allied activities | Rs.4 lakh p.a. (can include co-applicant's income) | 3 times of net annual income | 21 years to 70 years |
ICICI Bank Car Loan Eligibility
You can calculate your eligibility for a car loan from ICICI Bank by using the 'Car Loan Eligibility Calculator' available on their official website. You will need to enter details such as your contact number, type of residence, type of employment, the car model you wish to purchase, ex-showroom price of the car, etc., to calculate your eligibility.
Salaried Individuals | ||
Minimum Age | 20 years | |
Maximum Age | 65 years at the time of loan maturity | |
Minimum Monthly Income | Rs.30,000 | |
HDFC Bank Car Loan Eligibility
HDFC Bank car loan can be availed by the below-mentioned individuals/entities:
- Salaried individuals
- Self-employed sole proprietors
- Self-employed individuals/professionals at partnership firms
- Self-employed individuals/professionals who own private companies
- Self-employed individuals in public-limited companies including directors
Salaried Applicants | ||
Minimum Age | 21 years at the time of loan application | |
Maximum Age | 60 years when the loan tenure ends | |
Job Stability | Should have worked continuously for 2 years and at least 1 year with the current employer | |
Minimum Annual Income | Rs.3 lakh | |
Other Criteria | Should have a post-paid mobile/telephone | |
Self-Employed Individuals/Professionals (Sole Proprietorship) | ||
Minimum Age | 21 years at the time of loan application | |
Maximum Age | 65 years when the loan tenure ends | |
Business Stability | Should have been in the same line of business for at least 2 years | |
Minimum Annual Income | Rs.3 lakh | |
Self-Employed Individuals/Professionals (Partnership Firms/Private Limited Companies/Public Limited Companies) | ||
Minimum Annual Income | Rs.3 lakh | |
How to Improve Your Car Loan Eligibility
Some of the different ways by which you can improve the car loan eligibility are mentioned below:
- Improve the Credit Score : Your credit score is one of the most important factors that is considered when you apply for a car loan. Ensure you pay all bills on time so that your credit score is good. Having a good credit score will ensure that loans are provided at low interest rates.
- Co-Applicants: Adding a co-applicant will increase the chances of you getting a car loan. Having a co-applicant will show that the loan can be repaid on time.
- Clear Existing Debts: Make sure all outstanding payments are cleared. The debt-to-income ratio will be high if all debts are cleared.
Car Loan Advantages
Some of the main advantages of availing a car loan are mentioned below:
- High-end models can be purchased as the loan can be paid back in EMIs.
- Certain banks may offer car loan where no down payment has to be made.
- The tenure can be chosen.
Car Loan Eligibility Calculator
Many banks, such as ICICI Bank, HDFC Bank, Kotak Mahindra Bank, etc., lets you calculate your eligibility for a car loan through a 'Car Loan Eligibility Calculator'. This tool is available on the bank's official website.
Upon entering basic details such as your contact number, residence stability, type of employment, model and ex-showroom price of the car, etc., the tool will check if you are eligible for a car loan. The information you are asked to input, will vary from bank to bank and hence, it is recommended that you check the eligibility for specific lenders before you apply for a car loan.
Used Car Loan Eligibility for top banks
When you are applying for a pre-owned car loan, you will be required to meet a few basic eligibility criteria. These requirements can differ from lender to lender. These are the criteria for some of the top lenders:
HDFC Bank Car Loan Eligibility
For salaried individuals
- This loan can be taken by chartered accountants, doctors, and employees working at private limited companies and public sector undertakings.
- The applicant must be at least 21 years old and not more than 60 years old when the loan tenure has come to an end.
- The applicant must have been working at least for 2 years and for at least 1 year at the present company.
- The applicant should be earning at least Rs.2.5 lakh p.a. and this can include the income of the spouse.
For self-employed sole proprietors
- Applicant must be at least 25 years old and not more than 65 years old when the tenure comes to an end.
- Must have been in business at least for 3 years.
- Must be earning at least Rs.2.5 lakh p.a.
For self-employed individuals having private limited companies
- Must have a landline at the office of the company
- Must be earning at least Rs.2.5 lakh p.a.
For self-employed individuals belonging to Hindu Undivided Families (HUFs)
- Must be an individual in a business that belongs to HUF.
- The Karta needs to be the loan co-applicant.
- Must have a phone at the office of the company and at the residence. If only 1 landline connection is there, then a post-paid mobile which is only 3 months old can be used for applying.
ICICI Bank Car Loan Eligibility
You can receive a loan amount of up to 80% of the car's valuation with a maximum period of 60 months.
For salaried applicants
- Must be at least 21 years old and not more than 70 years old when the loan matures.
- The net annual salary should be at least Rs.2.4 lakh p.a.
- Should have been employed at least for 1 year.
- Should provide Form 16 and the latest salary slip to determine income eligibility.
For self-employed applicants
- Must be at least 18 years old and not more than 75 years old when the loan matures.
- The net annual business income should be at least Rs.1.8 lakh p.a. for certain models and Rs.2 lakh p.a. for other models.
- Should provide the latest Income Tax Returns to determine income eligibility.
- Should have been employed at least for 3 years in the same business line.
For self-employed non-individuals
- The net annual business income should be at least Rs.1.8 lakh p.a. for certain models and Rs.2 lakh p.a. for other models.
- Should provide the latest Income Tax Returns for 2 years and audited financials for 2 years to determine income eligibility.
- Should have been in the same business line at least for 3 years.
Car Loan Eligibility for Salaried Individuals/Self-Employed Individuals
The eligibility criteria for salaried as well as self-employed car loan applicants can vary from lender to lender. However, the common eligibility requirements are as follows:
- The applicant should be at least 21 years old and not more than 60 years old.
- The applicant should have been working in a job for at least 2 years. He or she should have been working for at least 1 year with the present employer.
- The applicant's income should be at least Rs.3 lakh per year.
- The applicant should be working in a private limited company or a public sector undertaking (PSU). This can be a state, central, or a local body.
- The applicant should have a post-paid mobile connection or a telephone connection.
- The applicant should be at least 21 years old and not more than 65 years old.
- The applicant should have been in the business for at least 2 years.
- The applicant should be a self-employed partner or a sole proprietor in any kind of trading, manufacturing, or service-related business. This can be a private limited company or a public limited company.
- The turnover of the business should be at least Rs.3 lakh.
Factors Affecting Car Loan Eligibility
- Credit Score: Lenders check your credit score in order to assess your repayment capacity and your repayment behaviour for your previous or existing debts. If you have a credit score of 750 or above, your lender will be of the opinion that you are responsible about repaying your loan on time and hence, will most likely approve your loan application easily.
- Type of Car: The type of car that you want to buy with car financing will determine your car loan eligibility. Each car model will have a particular resale value as per the features and specifications of the car. Hence, if the resale value of the car that you want is high, then your car loan eligibility will also be high. Since a car is an asset whose value depreciates with time, the resale value is taken into consideration in order to determine the eligibility.
- Employment status and longevity of business for applicants: If a salaried employee is applying for a car loan, he or she should have been working in his or her present company for a minimum of 1 year and should have been working for a minimum of 2 to 3 years. If the applicant is a self-employed person, they should have been in the same business for a period of at least 2 to 3 years.
- Income of applicant: When you apply for an auto loan, your lender will check your income levels in order to assess if you can pay the EMIs on time or not. If you have a higher income, the lender will be of the opinion that you can repay easily without any difficulty. However, if your income is slightly on the lower side, then your lender may be doubtful if you can pay every car loan EMI on time. Hence, the lender may give you a lower loan amount.
- Your Employer's Reputation: Sometimes, the company that you work for will help in improving your car loan eligibility. For example, if you are an employee at a Fortune 100 company or any other company that is ranking well, then your loan eligibility will improve. This way, you will be able to receive a higher loan amount to finance the purchase of your car. On the other hand, if you are not working in any such company, then it is important that you earn a high income in order to get a higher loan amount approved.
- Relationship with Your Lender: If you already have an account with some bank and if you have a good relationship with this bank, then you can negotiate with them to get a higher loan amount approved at a lower rate.
FAQs on Car Loan Eligibility
- What is the maximum repayment tenure in case I avail a car loan?
Certain banks offer a repayment tenure of up to 7 years in case you avail a car loan.
- Is it possible to check the car loan eligibility online?
Yes, certain lenders provide the option to check the car loan eligibility online.
- Do banks provide a part-prepayment option in case I avail a car loan?
Yes, certain banks provide a part-prepayment option in case you avail a car loan.
- Will car loan interest rates be low in case I have a good credit score?
Yes, car loan interest rates will be low in case you have a good credit score.
- Is it possible to apply for a car loan online?
Yes, certain banks provide the option to apply for a car loan online.
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