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Car Loan / Auto Loan – Complete Guide

What is a Car Loan?

A Car Loan or Auto Loan is a secured loan where the vehicle you intend to purchase acts as collateral. This means if you default on repayments, the lender has the right to repossess the vehicle. Ownership of the vehicle remains with the lender until the final installment is paid.

Much like a home loan, this loan is repaid in equated monthly installments (EMIs) over a fixed period.

Loan Tenure Options

Most car loans come with flexible tenure options such as:

• 36 months (3 years)
• 48 months (4 years)
• 60 months (5 years)
• 72 months (6 years)
• Up to 84 months (7 years) in some cases

Shorter tenure = Higher EMI but lower interest paid over time
Longer tenure = Lower EMI but higher interest cost

Key Features of Car Loan

• Loan Type: Secured (vehicle used as collateral)
• Ownership: Retained by lender until loan is repaid
• Loan Coverage: Up to 100% of vehicle value (On-road price)
• Interest Rate: Fixed or floating, depending on the lender
• EMI Structure: Fixed monthly installments

Eligibility Criteria for Car Loan

Criteria	Salaried Individuals	Self-employed Individuals
Age	21 – 60 years	18 – 65 years
Annual Income	Minimum ₹25,000 per month	Minimum turnover of ₹40 lakh/year
Credit Score	Minimum 700	Minimum 700
Loan Tenure	Up to 7 years	Up to 7 years
Loan to Value	Up to 100% of vehicle cost	Up to 100% of vehicle cost

Credit Score & Loan Approval

Unlike a personal loan, a low or average credit score might not stop you from getting a car loan. Since the loan is secured, lenders may still offer financing—although interest rates could vary slightly.

Car Loan vs Personal Loan – Key Differences

Feature	Car Loan	Personal Loan
Collateral Required	Yes (vehicle)	No
Interest Rate	Lower	Higher
Loan Tenure	Up to 7 years	Up to 5 years
Approval Flexibility	Higher (due to security)	Depends heavily on credit score

Need Help Applying for a Car Loan?

We assist you in comparing lenders, understanding EMI options, and filing your application seamlessly.

Call Now: +91-7752-443566 / 9098618647
Apply Online: www.gstsuvidhacentre.co.in
Email: info@gstsuvidhacentre.co.in