Cars have become a vital part of modern life. Today, cars are no longer a luxury but have become a necessity for most people. The busy lifestyle of people has made it impossible to rely solely on public transportation, which can be unreliable at times. Cars have become essential for people to travel to work, school, and other daily activities. Purchasing a car is a big-ticket expense and often requires a huge sum of amount. In such cases, car loans come in handy as they provide you with the required amount of funds. Car loans have made owning a car much easier. Instead of paying a lump sum for a car purchase, car loans allow you to pay in monthly instalments.
When you decide to opt for a car loan, it is important to check its eligibility criteria. Apart from having a good credit score, you also need to meet other parameters such as your age, minimum income, and more. Your age is a vital factor that determines car loan eligibility. Lenders use age to gauge the ability to repay the car loan and the risk of default. Getting a car loan at 18 years old can be a challenging task since most lenders are hesitant to lend to borrowers with little or no credit history. However, it is not impossible, and if done correctly, it can be a great stepping stone to building a good credit score.
Build credit score
The first step to getting a car loan at 18 is to establish a credit score by taking a credit card and making regular payments. This will help build a good credit history and increase the chance of getting approved for a loan.
Make down payment
The next step is to save for a down payment to reduce the loan amount needed. A larger down payment reflects positively on the borrower and reduces the risk for the lender.
Getting a cosigner on the loan
The third step is to consider a co-signer. A co-signer with a good credit score and a stable income can increase the chance of approval for a loan.
Conduct research
Lastly, it is important to shop around and compare loan offers from different lenders. It is essential to read the terms and conditions of the loan carefully and opt for a loan with a reasonable interest rate and manageable monthly payments.
Additional read: How much car loan can I get
Bajaj Finance offers two types of car loans – new car finance and used car loans based on the eligibility criteria and documentation required.
With new car finance, you can get funds for purchasing a brand-new car while used car loans provide financing for second-hand vehicles. If you are applying for our new car finance, you should be aged between 18 years and 80 years*. You also need to have a credit score of 720 or higher and have a minimum salary of Rs. 25,000. Self-employed individuals need to submit ITR proof as well.
On the other hand, you can qualify for our used car loan if you fulfil the following eligibility criteria.
Age: 18 and 80 years*
CIBIL Score: 700 or higher
If you are a salaried professional, you should have an experience of 1 year and a monthly salary of at least Rs. 20,000. However, for self-employed ITR proof is mandatory. Apart from these basic criteria, the age and condition of your vehicle are also evaluated in the case of used car loans.
*Higher age limit is applicable at the time of loan maturity.
