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Finance Tips

Too many car buyers overlook the importance of financing a car properly. In truth, getting the right car loan, at a good interest rate, is the best way to cut car-related costs. Here’s how you go about getting your vehicle financed

Banks are the most obvious source of getting finance. They offer good rate of interest especially with the cut throat competition amongst the various banks out there. The downside being the time taken to process the paperwork which could try your patience. But that can be fixed if you have some king of acquaintance with a particular bank.

There are also finance companies which are associated with dealers and manufacturers. Their service is usually quicker.

There are various finance schemes available with the most common ones being Zero per cent finance and Attractive rate of interests. With Zero percent finance the dealer and finance company bear the interest damage but the dealer discount is removed and the tenure is shorter than the regular schemes.

There are also attractive flat interest schemes available. The trick though is not to calculate percentage based on total numbers but to calculate owing on cash flow

Here’s some of the basic information required for financing a vehicle

Normal Eligibility Criteria:

  • Minimum age of applicant: 18 years (Salaried) and 21 years (Self Employed)
  • For Salaried Employees: Should have worked for one year in the current company
  • For Self Employed: Should have been at least 2 years in the business
  • Minimum Loan Amount generally given is Rupees One Lakh

Documentation Required for Car Loans:

All Banks and Financial Institutions offer varying interest rates for car loans. You need to submit the following minimum documents for approval of your car loan (documents may vary with the bank/financial institution to which you apply):

For Salaried Individual:

Address Proof (any of the following documents):

House Lease/ Leave & License agreement, Ration card, Driving license, House Tax chalan, Housing Society bill, Voter card, Passport, Telephone bill, Electricity bill, Water Tax chalan, Wireless Landline bill, Credit Card Statement, Post Paid Mobile bills (2 bills required one bill of the last completed month and one which is 6 months before the last completed month).

Identity Proof (any of the following documents):

Passport, Photo Credit Card, PAN Card, Voter Identity card, Driving license, Employee ID issued by Government of India/ PSU/ Limited companies, Local Panchayat Identity card, Notary certification with Photograph. Form 16 with latest Salary slips. Income Proof: Latest salary slips with the Form 16 document.

For Self Employed:

Address Proof:

The documents collected towards identity proof to reflect the current address of the concern/firm

Identity Proof (any of the following documents):

Passport, PAN Card, Voters Identity card, Driving license, Latest Sales Tax assessment order, Sale Tax registration certificate

Income Proof:

Latest Income Tax Return

For Partnership Firms:

Address Proof:

The documents collected towards identity proof to reflect the current address of the concern/firm

Identity Proof (any of the following documents):

Partnership deed, Shop & Establishment Act certificate, Latest Sales Tax assessment order, Sale Tax registration certificate.

Income Proof:

Audited Balance Sheet, Profit & Loss Account (latest two years) and the latest 2 years IT returns of the firm.

For Pvt. Ltd. Companies:

Address Proof:

The documents collected towards identity proof to reflect the current address of the concern/firm

Identity Proof:

Memorandum and Articles of Association (with registration certificate)

Income Proof:

Audited Balance Sheet, Profit & Loss Account (latest two years) and the latest 2 years IT returns of the firm.

 
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