Auto Loans in India are on rise in the past 3 years and the demand is especially coming from smaller cities. After the 2008 Crisis, Banks have tightened their lending norms towards unsecured loans – Credit Cards & Personal Loans and even for Auto Loans they are increasingly relying on Credit Reports ans Scores from all the Three bureaus – CIBIL-Transunion, Experian and Equifax.
Approximately 20% of the inquiries in the last few years have been for new Auto Loans at CIBIL. Delhi NCR alone contributes 35% of the Inquiries in this segment. So if you are planning to BUY a Car, kindly get Credit Report and Scores from atleast two of these Agencies – CIBIL-Transuinion or Equifax or Experian. Then make sure of the following to get approval for your car loan,
- No Defaults or Settlement in the Last 3 Years
- Credit Score of atleast 750 on a Scale of 900
- Source of Monthly Income proving your ability to re-pay the Loan.
- If you have other running loan accounts , the surplus after your monthly household expenditure, other loan EMIs must be atleast twice that of your Car Loan EMI.
Banks have also become cautions in lending to the Housing Sector as Indian Laws under the Negotiable Instruments Act and SARFAESI Act are not very useful while enforcing and this has resulted in 40 Lakh cases of Cheque Bounce pending in various courts of India.