Getting a car loan is not simply a matter of filling out the application form; it is a matter of making a good impression. You should be an efficient borrower and you should be able to plan your finances well. By following a few strategic moves you can stand an enormous opportunity of being approved.
● Check Your Credit Score Early
Check your credit record before you start your car loan journey. With a good credit rating, you become more reliable to borrowers. If your score is low, then you should pay off existing debts and make sure that you make no late payments in the next few months to boost your score.
● Collect all the required Documents
Strong documentation is essential. Standard documents consist of identity proof, address proof and income proof. Salaried people are usually required to provide the recent salary slips, bank statements, PAN card, Aadhaar and Form 16. Individuals who are self employed need to provide ITRs, bank statements, business evidence and other financial statements. Make a second check on the official car loan requirements for anything lender specific.
● Use a Co-applicant
Making a co-applicant, such as a spouse or family member, may help in strengthening your case. The lenders consider your income and credit score, which increase your eligibility and improve access to large loan amounts or better terms.
● Choose the Right Loan Amount
Try not to borrow till your maximum limit. Consider your income, expenses and existing obligations to understand what you can comfortably pay every month.
● Opt for the Shortest Tenure Possible
Choose a shorter repayment period if possible. Shorter tenures are considered to be less risky by lenders. This can lead to increased chances of getting a loan with lower car loan interest rates.
● Avoid Multiple Simultaneous Applications
Applying for several loan requests or applying simultaneously leaves imprints on credit reports, signalling risk to lenders. Only apply after you have done your research and are sure that you have selected the most suitable loan plan.
●Pay off Former Debts and Maintain Steady Income
Make attempts to settle the old loans and avoid large recent borrowings. Lenders like to lend money to those that have a history of making their repayments on time. You should also have stable employment or business revenue over the last few years to be able to get a suitable car loan.
● Be truthful and Real in your Application
Complete all forms with caution and do not exaggerate income or hide current debts. Any errors or omissions may result in rejection.
● Dealer Tie-Ups and Promotions
If you’re buying a Mahindra car, going with Mahindra Finance can sometimes make the loan process smoother and give you a bit more bargaining power.
● Retain Healthy Down-payment
A substantial down payment will convince the lenders of your intent and reduce perceived risk.
Proper planning and preparation of finances is likely to get a quick and favourable loan. You should also have correct documentation and an appropriate attitude towards the application process. Moreover, informed decision making makes your car buying experience easy and economical.