The eligibility criteria to avail a car loan may vary from lender to lender. The common criteria to avail a car loan is mentioned below:

• Age: The age limit to get a car loan is between 18 years to 65 years. However, many banks require a minimum age of 23 years.
• Income: To avail a car loan, you need a monthly income of ₹ 10,000 per month.
• Profession: Both salaried individuals and self employed professionals can avail a car loan. The interest rates are lower for salaried applicants.
• Credit Score: A credit score of 700 or above is considered an ideal score for availing a car loan . However, some banks give car loans at a credit score of 650 and above.
• Work Experience: The minimum work experience required to apply for a car loan varies for salaried and self-employed professionals. Salaried individuals should have a minimum experience of 1 year, and self-employed professionals should have business existence of minimum 5 years to avail a car loan.

Here is a list of essential common documents that are required by lenders to process your application for a car loan.

• Identity Proof: PAN card, Passport, Driving License, Aadhaar Card, Voter ID, Government-issued i-card.
• Address Proof: Passport, Driving License, Election ID card, Electricity/ Telephone/ Mobile bill/ bank statement (not more than 3 months old).
• Income Proof: Form 16, last 3 months salary slip, last 3 months' bank account statement showing salary credit.
• Age Proof: PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate.
• Quotation of the cost of the car selected from the dealer.

To get the best and lowest car loan interest rates online, read the do’s and don’ts mentioned below.

The best way to arrange funds while planning to purchase a new or old car is a pre-approved loan. A Pre-approved Loan is a credit that banks offer to their customers who have a clean credit history. These loans generally allow the customer to get credit with minimum documentation. Below mentioned are the important things for smooth and quick car loan approval

• Credit Report:You must regularly check your credit report for CIBIL scores. A 750+ score will help you in getting lower interest rates. Lower the score, higher the interest rates offered, or the application is rejected.
• On-time Bill Payment:To get a car loan, you must have a minimum monthly pre-tax income and a reasonable debt-to-income ratio. Increasing income takes time; hence, applicants can take steps to improve their debt-to-income ratio. Alwayspay bills on time to improve the debt-to-income ratio.
• Shop for Different Loan Products:Loan market offers multiple options for buying new or old cars. Before finalising, compare car loan interest rates offered by banks and NBFCs as per the requirement.
• Borrow as Less as Possible:Try to make the down payment A sizable down payment will decrease the loan amount, which will ensure less burden and hence, you pay less interest, low EMIs, short loan term.
• Select a Plan That Fits the Budget:Applicant’s repayment capability also determines the loan approval chances. While planning to get a car loan, borrowers must ensure that they can afford the extra burden of EMIs on their monthly income. Further, A car loan with low EMIs and long term is not a good option if you can afford higher EMIs; Applicants must choose a scheme that offers low-interest rates and shortest duration possible.
• Option to Get a Car Insurance with Complete Coverage:The banks and NBFCs are primarily worried about losses they may face when providing a loan. For certain companies, full coverage insurance is a prerequisite before a car loan is sanctioned as this allows them to reclaim the balance debt when the borrower is at fault in an accident.

You have to repay the car loan amount in easy EMIs till the end. However, if you decide to pay the outstanding dues at once, that means you are foreclosing the loan which is better and different from settling. Lenders may or may not charge the foreclosure fees.The prepayment charges may be NIl or up to 5.21% for car loan prepayment or foreclosure.

After availing of the car loan, you may come across emergencies such as marriage, medical issues, etc. To address this issue, you can ask for a top-up on the existing car loan. Lenders offer 150% of the car's value as a top-up amount. You must have a clean repayment history to avail Top-Up loan. HDFC, Axis, ICICI Bank are some of the primary lenders offering top-up on car loan services.

The term refinancing a car means replacing the existing car loan with a new car loan from a different lender. You can take a refinancing car loan to avail the following benefits.

• Reduced interest rates: You can repay the existing car loan and get a new car loan from a different lender if the interest rates for a car loan is lower for another lender. However, before opting for a car loan with a new lender ensure that the prepayment charges/fees do not exceed the overall reduction in interest rates.
• Modifying the loan tenure: You can take a refinancing car loan if you want to increase/decrease the tenure of your loan. The tenure of a car loan is inversely proportional to loan EMI, which means that you have to pay less EMI in case of longer car tenure and vice versa.
• Other modifications: It is likely that you come across better car loan offers in terms of late fees, hypothecation, insurance, application charges, etc. and thus you may choose to take a refinancing car loan to avail better features.

In the latest union budget, the government made below mentioned provisions to stimulate environmentally friendly vehicles

• You can enjoy a tax exemption of ₹ 1.50 Lakh on the interest if you take a car loan to buy an electric vehicle(EV).
• In case of purchase of an electric vehicle(EV), you can avail a benefit of about ₹ 2.50 Lakh during the entire loan tenure.
• The government has also cut the tax rates from 12% to 5% on Electric Vehicles.