Documents Required for Car Loan: Checklist of Documents For Salaried Professionals & Self-Employed

It may be easy to get a car loan, but you need the right documentation to ensure that your car loan is authorised. With proper documentation, some banking and financial institutions will offer 100 per cent loan of your dream vehicle. Do note that the loan amount is for the ex-showroom vehicle price in your city. Other payments that include vehicle insurance, registration, stamp duty, and octroi will be incurred by you (the buyer).

Importance of documentation

You are required to submit documents to mainly verify your credibility with the financial institution giving you the auto loan. This is because thousands of individuals coming from various financial backgrounds apply for a car loan every day. As a result, the bank or financial institution issuing the car loan will ask you for documentation. Once this is submitted, the bank conducts a background check to verify your documents for a car loan. In addition, your credit score and financial position – salaried, self-employed, etc – will be checked.

In case you have a good credit history, then you will have hassle-free car loan disbursement. However, in case you have a poor credit score, then chances are that you may face some restrictions from the lender. These could include only a certain percentage of the vehicle’s showroom price, as opposed to 100 per cent of the showroom price. Sometimes, depending on the bank, you may also be required to pay a higher interest rate. Some banks even insist on additional documentation such as mortgage details and credit card statements. In some cases, a poor credit history may result in the downright rejection of a car loan.

Documentation for salaried professionals

Identity proof: (Any one of the following) Passport, PAN Card, Aadhaar Card, Voter ID

Address proof: (Any one of the following) Passport, PAN Card, Aadhaar Card, Voter ID, utility bills (light bill, telephone bill, gas bill)

Age proof: Passport, School leaving certificate, Aadhaar Card, birth certificate

Income proof: Salary statements for the last six months, bank statements for the last six months (Note: The months may change depending on the bank issuing the loan. Some Banks and financial institutions only ask for three months salary slip, while bank statements are six months old)

Signature proof: You need to submit your signature, as it will be required for verification at the auto dealer selling you the car

Documents for self-employed individuals

Identity proof: (Any one of the following) Passport, PAN Card, Aadhaar Card, Voter ID

Address proof: (Any one of the following) Passport, PAN Card, Aadhaar Card, Voter ID, utility bills (light bill, telephone bill, gas bill)

Age proof: Passport, School leaving certificate, Aadhaar Card, birth certificate

Signature proof: You need to submit your signature, as it will be required for verification at the auto dealer selling you the car

Business ownership proof: Office address, maintenance bill, or utility bill to prove that the business is under operation. You will also be required to provide a copy of the business registration license

Income proof: Income tax returns for up to 2 years is required to prove that you are paying taxes to the government. You will also be required to provide documents like audited balance sheet and profit-loss statement must also be filed with the lender.

FAQs

Can I submit digital copies of my documents?

Yes, you can. However, you will also be required to submit self-attested photocopies of the documentations to the bank/financial institution that provides you a loan?

I have a poor credit score. How can I get a loan approved?

You will be required to submit additional documentation, including mortgage paperwork, and your credit card statements. Furthermore, you may get a loan approved with a poor credit score, but with certain conditions i.e. you may be required to pay a higher rate of interest or the bank may not issue 100 per cent of the showroom price of the vehicle

How long will it be before my loan gets sanctioned?

Once you submit your documentation, the bank will send a representative to your home and workplace to cross-check the information you have shared. Once these formalities are completed, your car loan will be disbursed

To be placed in H2 tag. Also, the Questions under FAQs to be placed in H3 tag as shown below. Kindly follow the same for all other questions.

[“source=moneycontrol”]