Owning a car was earlier viewed as a luxury. However, today, it has become more of a necessity. People need a reliable mode of transportation to get from one place to another. They need a vehicle they can call their own and use whenever necessary. But buying a car is not feasible for all. It costs a considerable amount that many cannot afford.

For such individuals, a Car Loan serves as a viable option. Also known as an Auto Loan, it lends borrowers a sum of money to purchase a car. Here are the benefits of opting for such a Loan:

• Improves credit score

Since repaying a Car Loan is not difficult, most borrowers pay off the Loan amount on time. Such prompt repayment further improves their credit score. It reflects their credit history and enhances their eligibility for future Loan applications.

• Easy repayment structure

Repaying a Car Loan is relatively easy. Through equated monthly instalments, you can do this without any hassles. You can also decide the amount of the EMIs in most cases. To enjoy this perk, however, pick a reliable provider. If you wish to calculate the interest on your Loan, tools like the Car Loan EMI calculator help. It is a free online financial tool that estimates compound interest instantly.

• No collateral required

Collateral is any asset you present against the Loan amount. For instance, a Gold Loan uses your gold as collateral. This way, most lenders ask the borrower to present such collateral. However, a Car Loan does not demand such a requirement. You need not present collateral.

• Minimal documentation

Reliable lenders tend to ask for minimum documentation for the Loan. They understand your needs and, hence, keep the process simple. You need not wait for ages to get through the application procedure. Everything is done efficiently, be it approval or disbursal. Here are some documents you need to present for the application:

• Identity proofs (Aadhaar card/ Driving license /PAN Card /Passport)
• Address proofs (Ration card or utility bills in your name)
• Age proofs (Birth certificate/School transfer certificate/Class 10th mark sheet/Aadhaar)
• Income proofs (Salary slips of the last six months, depending on the provider’s requirements)
• Bank statement (past six months of bank statement)

• Quick disbursement

Buying a car is exciting, especially if it is your first time. However, Loan amounts often take a while to disburse into your Bank Account. This leaves you waiting in anticipation. To avoid such inconvenience, Car Loan providers nowadays offer quick disbursals. Once your application gets approved, the amount gets credited to your account instantly.

Conclusion:

Opting for a Car Loan offers a multitude of benefits that make the dream of owning a vehicle a reality. If you have any queries, contact your banking partner for proper guidance.