How to Check Your Eligibility for a Car Loan? Know The Amount You are Eligible to Borrow

20 February, 2024

For many people, owning a car is a cherished dream and Car Loan help to make this dream come true. However, to secure a Car Loan it is crucial to determine how much you are eligible to borrow. Checking your eligibility for a Car Loan will help you to set an accurate budget and streamline the process of Loan application. Read on to know how you can check your eligibility for a Car Loan.

How to Check Your Eligibility for a Car Loan?

Priorly determining eligibility for a Car Loan can help you prepare required documents easily. Here is how you can do it:

• Check your credit score: One of the first thing you need when assessing your eligibility for a Car Loan is your credit score. Your credit score reflects your creditworthiness. It is a three-digit number that ranges from 300 to 900, wherein higher score typically indicates better repayment capacity. Therefore, you may be able to secure a greater loan amount.
  
  

• Evaluate your debt-to-income ratio (DTI): It shows the part of your monthly earnings that you use to pay off debts. To figure out your DTI ratio, add up all your monthly debt payments, like Credit Card bills, Home Loans, and any other debts you have. Then, divide this sum by how much you make in a month before taxes and other deductions. Ideally, this percentage should be as low as possible.
  
  

• Use online eligibility calculators: To get an estimate of the amount you are eligible to borrow, consider using online Car Loan eligibility calculators. These tools are provided by banks such as HDFC Bank. You will need to enter your monthly income, and monthly debt payments to get the approximate amount you are eligible for a Car Loan.
  
  

Eligible borrowers for a Car Loan

Check whether you fall into the category of eligible borrowers. The following is the eligibility criteria for Car Loans from HDFC Bank.

• Salaried Individuals: If you are a salaried individual, you need to meet the following criteria to be eligible for a new car loan:
  
  ​​​​​​​> Employment: You should be employed by either a private limited company or a public sector undertaking, whether it is a state, central or a local entity.
  
  > Age: You must be at least 21 years old when applying for the loan and not older than 60 at the end of the Loan tenure.
  
  > Work experience: You should have a minimum of two years of employment history, with at least one year at your current job.
  
  > Income: Your annual income should be a minimum of ₹3,00,000, including income earned by your spouse or co-applicant.
  
  

• Self-employed professionals: If you are engaged in business through a private limited company, proprietorship firm, partnership firm, or public limited company, these criteria are applicable on you:
  
  > Age: You should be at least 21 years old when applying for the loan and no older than 65 at the end of the loan tenure.
  
  > Business experience: You should have been in business for a minimum of two years.
  
  > Income: Your annual income should be at least ₹3,00,000.
  
  > Turnover: You should have a minimum annual turnover of ₹3,00,000.
  
  

HDFC Bank Xpress Car Loan with Quick Approvals

Our hassle-free and completely digital Loan application process can get you behind the wheels in no time. All you need to do is visit our Xpress Car Loan portal, complete the application online and get loan approval within 30 minutes*. Plus, with instant disbursement and minimum documentation your new car is just a few clicks away. Get started here.

*Disclaimer: Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit at sole discretion of HDFC Bank Ltd. Other charges and taxes as applicable. The offer is unconditionally cancellable without prior notice. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.