All You Need to Know About HDFC Car Loan

If you want to buy your dream car right away but do not have a sufficient amount for it, how can you fulfill your dream? Well, you can try borrowing money from family or friends or you can choose to take a car loan from a bank. With HDFC car loan schemes, most people would find a suitable plan for their dream car. There are loans available for new cars as well as pre-owned cars. You can calculate the loan amount using the HDFC car loan calculator.

What Is the Loan Amount That You Want?

With HDFC, it is even possible to get 100% financing from the bank for your car purchase. This means that you need not to make any down payment when applying for a loan, which is generally expected to be at least 10-15% of the car value. You might be required to pay a processing fee and the cost of any additional accessories that are not a part of the original package.
This 100% financing is subject to the following terms and conditions:
You should clear the eligibility criteria in terms of annual income so that your net annual income is higher than the loan amount applied for.
Your work experience should also be more than the minimum qualifying criterion.
You should have a good CIBIL score.
Lack of any existing loans will be kept in consideration and any existing loans could reduce the chances of zero down payment loan.
A higher value of the car could also diminish the chances for approval of 100% finance. These are available for cars under a certain value only.
An existing relationship with the bank works in your favour.

What Are the Eligibility Criteria for HDFC Car Loans?

For an HDFC car loan, you can get loan up to 3 times your yearly income if you are salaried. In the case of self-employed, the limit is 6 times the income. To match up with the criteria, you can always get a co-applicant to join you and your incomes together can be considered for eligibility.

What Are the Documents Required for Loan Approval?

The basic requirement of a bank giving you loan is to check if you are financially stable and will be able to pay all the EMIs comfortably. They would require your identity proof, address proof and income proof along with the car documents for processing the loan. If you are already a customer with the bank, you need not to submit any document for processing the loan.

What Is the Monthly Outgoing for Repayment of the Loan?

For the repayment, you will have to pay an EMI for the selected tenure. EMI stands for Equated monthly installments, which are calculated keeping in mind the loan amount, the interest rate and the tenure. You can calculate these yourself using the HDFC car loan EMI calculator. With the help of this calculator, you can work out the EMI for different combinations of the three parameters and choose the best option.

Flexible EMI Schemes

The loan repayment is made very easy for the consumer by the various options such as the step-up and Balloon EMI options. The EMIs for a smaller car can get you a bigger car.
With the step-up EMI scheme, you can start with lower EMIs and slowly increase them with the growing income, while in the balloon EMI payment mode, you pay a larger sum initially and reduce the EMI with the passage of time.

Additional Read: Calculate EMIs in Advance for HDFC Car Loan

How Much Interest Will I Pay on the Loan?

That depends on the interest rate that you have managed to get from the bank. The HDFC rate for car loans varies between 8.85% and 11.6%. You can get a better rate from the bank if you have been able to manage a great credit score or if you are an existing customer of the bank. It also depends on the tenure that you have selected. If you have a chosen a longer tenure, you will pay a much larger amount as interest as against a shorter tenure. HDFC car loan interest calculator can get you a detailed payment schedule with the EMI split by interest and principal component.

Can I Foreclose the Loan?

When you take an HDFC Bank Car Loan, you do have the option of making the full payment before time, but there is a chance that you might need to pay a penalty as the bank would end up losing out on the interest income. Flexible options are available for foreclosure from HDFC, but that too is possible after payment of a minimum of 6 EMIs. You can then foreclose the loan after paying the interest due on the outstanding balance. You also have the option of making part payments but only twice in the entire tenure. This helps in reducing the interest paid.

What Benefits Can I Enjoy As An Existing Customer?

As an existing customer, you have access to better interest rates and as the bank has access to all your details, you do not need to submit any document and hence can get a quick approval as well as disbursal of funds. You can get instant online loan approval via ZipDrive, the exclusive loan process for existing customers.

HDFC loans are all set to make it easy for the consumers to own a car of their dreams on their own terms. With the high amount of financing and flexible payment options, it is easier than ever to own a car.

Author Since: Jan 17, 2019

Anoop Bansal, a professional Chartered Accountant based in the National Capital - Delhi. I have worked for the top-notch Indian and International banking firms for the past 10 years. Currently, I work at blog and a financial consultant for different SMEs in India. Follow me on Facebook, Twitter and Linkedin for more information.

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