Know what Car Loan is and What Conditions Must Be Followed to Get It
Car is an important thing that people require to fulfill their important needs. But it is one of those items that get considered as expensive. When a person buys a new car or a used car by borrowing money from a bank or any privet money lending company, then it is called a car loan.
While paying back the borrowed money, a loan taker is always excepted to pay interest on the basis of the loaned amount. This is how money lending organizations generate revenue.
But not anyone can get this loan because there are some basic conditions or criteria which the loan providing organizations set and one has to follow them all. If any interested person fails to meet these basic criteria then he would never be granted to get a car loan at any cost. Let us discuss the conditions written below.
Proof of Earnings
Every bank or privet loan providing company asks for the proof of earning or income from the person who is seeking automobile loan. Loan providers check if the person has a steady income or not. In this regard, the loan providing side checks all the bank documents of the candidate before proceeding further.
Then they do employee verification of the candidate. If all these tasks get rightly done, then they do check the credit card details of the candidate to verify the previous mortgage status if there is any.
Details of the Car Loan
The loan providing companies check the details of the particular automobile that one intends to buy through the loan. When that same automobile gets certified as environment-friendly, it becomes easier for the person to get a loan to buy the same.
The loan providing companies also check if the car is insured or not or if it is a used car then whether it has past legal issues or not.
Proof of Identity
Before passing a car loan to anyone, a bank or loan providing organization, always ask for all the documents that prove the person’s identity. The organization also does a thorough personal identification of the person.
Original copies of a utility bill, passport, registered photo ID and current bank statements get needed in this case. But if the person has prior terms with the organization, then the procedure of identity proof does not get very tough.
Proof of Residence
The loan providing authorities always ask for strong address proof before granting a loan including for the loan for the automobile.
The loan providing companies ask for the address proof just ensures that the candidate will be found at a certain place if he stops paying back the loan amount. In this regard, utility bills and other ID cards registered by government works great.
Proof of Insurance
It is always suggested to ensure the car that is about to buy by taking the loan. One can ask an insurance company in this purpose from the car showroom itself but it is better to get the insurance done before picking the car and once the car loan gets generated.