If you’re planning to finance a vehicle, the first step towards a successful application for a car loan, is to understand your eligibility. Car loan guidelines and requirements vary by lender, but most lenders will require a standard range of eligibility requirements.
Basic Requirements
Age limitations. Most lenders require car loan applicants to be between 21 years old and 65 years old.
Income. To be eligible for a car loan, most lenders will ask for proof of income. A consistent and verifiable source of income is important for lenders as it shows an ability to repay the loan.
Credit Score. A healthy credit score increases your chances of a quick car loan approval.
Employment Conditions. Most lenders accept both salaried and self-employed people, provided they meet satisfactory income conditions.
Documents Required
Identity proof. Any one of these will work; passport, driving license, or national identity card.
Address proof. Acceptable forms include utility bills, rental agreements, and any documentation issued by a government agency.
Income proof. Acceptable forms are bank statements, salary slips, and tax returns.
Details of vehicle. Proforma invoice or quotation of the vehicle being purchased.
Tips for easy approval
1. Work on your credit score. Pay your bills in a timely manner and pay off any overdue amounts before applying.
2. Use the right amount for your car loan amount. Make sure that the amount is appropriate and relevant to what you can afford to pay back.
3. Choose a lender that works for you. Different bank or finance companies will have different car loan eligibility requirements.
4. Job history. You may have more luck in being viewed as a low-risk interaction with the lender if you have stability within your occupation; the longer your job history, the less likely you will have trouble repaying your loan.
5. collect all documents in advance. This will keep the process running on time, and ensures any possible delays shall be relatively minor.
Final Thoughts
It is easier to qualify for a car loan when you are prepared. Understand the requirements, get your documentation in order, and take steps to bolster your application- it increases the likelihood of quickly getting a car loan with good conditions.
