A Car Loan allows you to buy your dream car without having to pay the full price right away. However, to get a Car Loan, you need to fulfil eligibility criteria related to your income, age, credit score, credit history, and so on.
Banks set these criteria to make sure that you can handle the loan responsibly and repay on time. By taking some simple steps to improve your Car Loan eligibility, you can demonstrate yourself as a strong candidate for a Car Loan. Read on to know how to increase your Car Loan eligibility by following some simple tips.
5 steps to improve your Car Loan eligibility
1. Research eligibility criteria well in advance
Visit your chosen bank's website and check their Car Loan eligibility requirements in advance. Note down the requirements that you don't meet and make sure you work on them before applying for a loan. If you apply for a loan regardless, your application could be rejected, hurting your credit score. You can use a Car Loan EMI Calculator to make sure you can afford your future loan EMIs.
2. Improve your credit score
Banks look at your credit score to judge your creditworthiness. A higher credit score will make you an ideal candidate for a Car Loan. You can get a better Car Loan interest rate, higher loan amount and other favourable terms. To improve your credit score -
- Pay your existing loan EMIs and Credit Card bills on time
- Keep your credit utilisation ratio low
- Avoid applying for new loans frequently
- Clear your existing debts
3. Demonstrate that you have a stable income
You are more likely to be eligible for a Car Loan if you can show that you have a stable income. Submit documents like your salary slips, income tax returns and bank statements to prove the stability of your income.
4. Add a co-applicant
If you don't have the best credit score or a stable income, consider adding a co-applicant with better eligibility criteria. A co-applicant with a high credit score would strengthen your application.
5. Increase your down payment amount
Banks generally require you to pay a minimum of 15% of your car cost as a down payment. Increasing this amount can show that you are financially stable and have the ability to pay back your dues.
Also Read: Procedure, charges & documentation for Car Loan Closure
Conclusion
You need to be financially disciplined to improve your Car Loan eligibility. You must pay your existing dues on time, save for a higher down payment, and have a stable income. Furthermore, you need to follow the steps mentioned above consistently for a few months to boost your chances of getting a Car Loan.
Apply for a Car Loan with Axis Bank to get attractive interest rates, comfortable tenures up to 7 years, and a high LTV ratio. The minimum loan amount is ₹1 lakh and you can get up to 100% on-road funding for your new vehicle. You can also get Axis eDGE reward points and other special benefits, depending on your eligibility. Drive your dream car home today!
Disclaimer: This article is for information purpose only. The views expressed in this article
are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd.
and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader
for taking any financial decisions based on the contents and information. Please consult your financial advisor
before making any financial decision.
