Guide On Buying & Selling Used Cars/Kuwy Blog

Are you eligible to opt for a car loan?

Previously, owning a car was considered a luxury and an aspirational objective. However, circumstances have changed and possessing a car is now considered a necessity in the life of many people in India. The increase in disposable income, existing rates, and the convenience it brings to daily commutes are all factors contributing to the growth in car sales. Understanding the primary elements evaluated throughout the standard auto loan processing can be essential for those seeking inexpensive car loans but unsure of their eligibility.

Credit Score Evaluation: The credit score, commonly known as a CIBIL score, is an important factor in the traditional vehicle loan application procedure. Lenders examine this three-digit summary of a person's credit history to determine the borrower's repayment capabilities and past debt behaviour. A credit score of 750 or higher establishes an individual as a responsible applicant, increasing the likelihood of a quick and simple loan approval. On the contrary, inconsistent payment habits may complicate loan acceptance across multiple lenders.

Employment Status and Income Evaluation: To assess eligibility, factors such as income level, applicant's occupation, age, and so on are evaluated. Salaried applicants should have at least one year of experience in their current organisation, while self-employed individuals should have been in the company for at least two to three years. Lenders examine the borrower's income and spending habits to verify that the EMI payments are made on time. Higher-income candidates may be eligible for greater loan amounts and more favourable EMI schemes, whereas lower-income applicants may be eligible for lesser loan amounts with fewer perks.

Consideration of Car Type: The type of car picked has an impact on car loan eligibility. Model, manufacture, and whether the car is pre-owned or new are all important factors in calculating the loan for the applicant. Because the value of an automobile depreciates over time, financing for a used car may differ from loan conditions for a new car.

Lenders do a thorough background check on applicants, looking into things like prior loans, payment history, residence stability, steady income flow, and profession. This thorough examination aids in the prevention of potential future problems. Unfortunately, certain applicants may face difficulties as a result of reasons such as low income, previous EMI payment delays, or inability to show confirmation of permanent residence.

Personal Interaction with Lender: Making a personal relationship with a lender or a bank employee might be beneficial. This relationship may help negotiations for a larger loan amount at a cheaper interest rate. Furthermore, personal contact may speed the loan application process, decreasing the number of visits to the bank and assisting with the frequently complex paperwork involved in traditional lending procedures.

At Kuwy, we understand that vehicle loans are more than just financial transactions; they are the key to making your aspirations a reality. Kuwy offers customised loans for every customer since we understand their different demands, including low-income professionals and those with poor credit. Download the Kuwy app to streamline your loan application process, ushering in the future of automobile finance and avoiding the sophisticated paperwork.

 

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