Shruti changed her job a few months back. She applied for a car loan, she had complied with all the formalities, had checked her credit score but still her loan application got rejected. She had even chosen the car model and color she wanted to buy. The loan was rejected as the bank she had applied to had “continuous one year of employment” as an eligibility criteria.
Could Shruti have avoided this? Yes she could have definitely avoided this by visiting the bank’s website or the branch to check their car loan eligibility criteria. There are lots of banks that do not have this requirement and she could have applied to one of those banks. She would have saved herself time, the processing fee and a hit on the credit score due to a hard enquiry. Being prepared when you apply for a car loan helps you in getting a quick approval without any hassles. A few aspects that can help in getting car loan approval are discussed here.
Be Aware of Your CIBIL Score:
CIBIL score and the eligibility criteria are the two considerations for banks when they decide who to lend to and whose application to reject. The right way is to start concentrating and working on your CIBIL score at least a few months in advance so that you have sufficient time to improve it (if required). In case you have not done that, then before you apply for a loan, get your credit report. A look at your credit report will make you aware of any problems that might be there and which may be causing your credit score to be low. You can look for a credit solution that can improve the situation. There are a few ways to improve credit score fast and you could use one or more of these options to improve credit score. If enhancing the credit score is not possible then you should concentrate on banks that are willing to lend at the level of your CIBIL rating. This will save time and will not result in a hard enquiry which can lower your credit score further.
Auto loans are offered by numerous banks and financial institutions; the rates, term and eligibility may vary. Before the applicant applies for a loan he/she should check the rates offered by various banks to get the best deal for him/her. Apart from that; factors like processing fees, turnaround time, other fees, loan tenure, and loan percentage should also be checked; this information is easily available online. Checking beforehand ensures that you get the best deal in terms of rates, tenure and processing time.
Check the Eligibility Criteria:
Though the basic criteria remains same yet each bank may have slight variations in what is acceptable to them. The eligibility criterion includes minimum/maximum age, income criteria, length of service etc. Apart from that the bank may also require certain documents to be submitted by the applicant. The applicant should check the bank’s requirements before actually applying for the loan to ensure that they fulfill and meet the bank’s requirements to get the loan sanctioned. This will ensure that the applicant’s loan is not rejected for not meeting some basic criteria; doing your homework beforehand ensures smooth and fast processing of the application.
Get the Documents Ready and Apply:
After the applicant has ascertained the requirements that are required to apply for a loan they need to get their documents ready and apply. Required documents are submitted along with the application. The documents ascertain whether the applicants meet the eligibility criteria. After scrutinizing the documents and application, if the applicant has the required CIBIL score his/her application is processed.
Following the process and being a little proactive helps to get your car loan approved without much delay and any hassles.