The economic boom in India has steadily market the rise of upper middle class. Individuals from these groups earn a decent pay package which enables them to purchase anything. This has also resulted in increase demand for cars. Not only this, various car companies have set up bases in India, so that they can cater to the various sections of the population. It is because of this that car loans now play a significant role, as it enables the individuals to purchase the car of your choice.

There are various aspects which you must take in to account, if you are availing the loans. if you are a salaried individual, the banks usually offer the finances which is usually 2- 3 times of your monthly salary. On the other hand if you are self employed, the amount offered will be 6 times of your annual income. Further if you are going to purchase a new car, you will be offered 90-100 % of its ex – show room price. If the car you intend to buy is a used one, then you will be able to obtain 80-90 % of the finance.

These are similar to secured loans as you are required to place the car intended to buy as collateral. That does not mean that you will not be able to use the car. Once you have paid off the loans, you will be able to retain the ownership title.

The repayment term for the loans is short and spans over a period of 5- 7 years. Interest rates charged in the loans are based on your repaying capability. If you are paying a huge down payment, then you will be able to obtain the loans at competitive rates.

While availing the loans, you have to provide certain documents such as identity proof, income and employment proof, residential address etc. for a salaried individual it is must to submit the recent salary skip. On the other hand, a self employed person has to submit bank statements of the past 2 years.

Car loans in India can be sourced from various banks and financial institutions. However to derive the best deals, you should compare the quotes of various lenders. The loans availed should be such that it suits your requirement and circumstances best.