The various factors on which the loan amount depends on are -
Cost of the car:
Usually, finance companies finance up to 95% of the ex-showroom cost of the car for new cars and maximum of 90% of the valuation of the car for used cars. Minimum loan amount for new car is Rs. 1 lakh and Rs 75000/- for used cars.
Income of the person:
Finance companies give a loan of 15-20 times the monthly income. Higher loan amounts are available under specific enhanced income eligibility criteria.
Instalment to Income ratio (IIR):
Most finance companies give loans so that monthly Instalment to monthly income ratio is in range of 40-60%.
Model of the Car:
For e.g., you can get 90% finance in case of Maruti 800 but only 75 per cent in the case of an Ambassador.
Tenure of the loan:
For e.g., finance companies finance 90% of the cost of the car for a 12-month tenure, whereas on the same car, they finance 75% for a 60-month period. The financing is done for an amount usually above Rs. 50,000 and some finance
Loan Enhancement:
• To enhance your loan amount, the certified income of the co-applicant can be considered, if requested by the applicant.
• The co-applicant can be the spouse or son/daughter living in the same city.
• Similarly, in case of a partnership firm or a limited company one of the partners or a director can be taken a co-applicant / guarantor for increasing the loan amount.
However, in both cases, the asset has to be registered in the name of a single owner, not joint ownership.
