Posted on: July 15, 2019 Posted by: Colin Child Comments: 0

Proof of Income for a Car Loan

Any type of loan application you make requires you to submit proof to support your claims of identity, income, and address. In the case of a car loan, your income determines whether you qualify for the loan or not. Whether you are a salaried employee or a self-employed person, when applying for a car loan you should submit income proof as it indicates your loan repayment capacity to the lender. 
Here is a list of lenders and their proof of income requirements for a car loan: 
Lender 
Income proof for salaried applicants 
Income proof for self-employed applicants 
HDFC Bank Car Loan 
·        Last 6 months’ bank statement 
·        ITR or Form 16 for last 2 years 
·        Audited Balance sheet and Profit & Loss statement for 2 years 
·        Shop and Establishment Act certificate, sales tax certificate, SSI registered certificate, or copy of partnership 
IndusInd Bank Car Loan 
Self-attested photocopy of any one of the following: 
·        Last 2 years’ IT returns with computation 
·        Salary slips of last 3 months 
Self-attested photocopy of any one of the following: 
·        CST Certificate or Labour Act 
·        Proof of ownership of entity 
·        Shop and Establishment Act or SSI certificate 
·        Rental deed or utility deed in the name of the company 
·        Bank statement for the last 6 months 
Kotak Mahindra Bank Car Loan 
·        Last salary slip showing statutory deductions 
·        Form 16 or IT Returns 
·        Profit & Loss Account and Audited Balance Sheet for the last 2 years certified by CA 
·        Copies of Income Tax Returns for the last 2 years 
·        Partnership Deed or Trust Deed 
·        Letter of Authority 
·        MOA and Board Resolution authorising one director to execute the agreement 
·        Computation of Income for the last 2 years certified by CA 
State Bank of India Car Loan 
·        Last 6 months’ bank statement 
·        ITR or Form 16 for last 2 years 
·        Audited Balance sheet and Profit & Loss statement for 2 years 
·        Shop and Establishment Act certificate, sales tax certificate, SSI registered certificate, or copy of partnership 
Axis Bank Car Loan 
·        Last 2 months’ salary slips 
·        Latest Form 16 
·        Latest ITR     
·        Last 3 months’ bank statement 
·        Copy of Appointment Letter, Date of Joining on Salary Slip, Work Experience Certificate, or Relieving letter 
·        Shop and Establishment Act Certificate, SSI/MSME Registration Certificate, Sales Tax/VAT Certificate, or Current Account Statement 
·        Audited Balance Sheet or Profit & Loss Account 
·        ITR for last 2 years 
*Salaried employees mean those who work for public sector undertakings, private limited companies, central and state governments, and so on. 
*Self-employed persons mean those who own a private company in trading, service or manufacturing sectors, or they are directors of public limited companies in the above-mentioned business sectors. 

What is the minimum income requirement for a car loan? 

In the case of income criterion, the minimum requirement varies from lender to lender. In order to get an accurate insight into the car loan eligibility criteria of a lender, visit the official website or nearby branch office. 
Use the car loan eligibility calculator available on the lender’s website to find if you meet all the eligibility criteria or not. Reputable lenders will be transparent about their car loan eligibility criteria. Here is a generic outlook on the minimum employment and income requirement: 
·   Years of employment: Lenders expect you to have minimum 2 years of employment experience and at least 1 year working for the same employer. If you are a self-employed individual, you should have owned the business for minimum 2 years and in the same field.  
·       Income on a monthly and annual basis: To meet the minimum income requirement, you should earn Rs.1.8 lakh per annum or Rs.15,000 per month. 
·       Include spouse or co-applicant’s income: There are cases when individual income may not suffice for a car loan. In such cases, at the lender’s discretion, you can add your spouse or co-applicant’s income to meet the minimum requirement. 

Generic car loan income proof documents 

For residence or employment address proof, Aadhaar, PAN, voter’s ID, driving license, passport, and utility bills like electricity or telephone bill can be furnished. For age and identity proof, Aadhaar, PAN, voter’s ID, driving license, and passport can be submitted. For income proof, keep the following documents handy when applying for a car loan: 
In addition to the duly-filled and signed car loan application form, salaried employees should submit the following: 
o   Latest Form 16 and Income Tax Returns (ITR) 
o   Last 6 months’ pay slip or salary slip  
o   Last 6 months’ bank statements 
Self-employed applicants should submit the following: 
o   Last 2 years’ Income Tax Returns  
o   Last 6 months’ bank statements  
o   Business certificate 
o   Last 2 years’ Profit & Loss statement  
o   Audited balance sheet 
As the list of documents required varies with lenders, it is prudent to reach out to the lender to find out what other documents you should submit. 

9 tips for guaranteed car loan approval 

Follow the below mentioned tips to get your car loan approved: 
1.    A good credit score of 750 and above indicates your creditworthiness to the lender. 
2.    Make use of the online car loan eligibility calculator to find out if you meet that particular lender’s requirements, so that you can avoid loan rejection. 
3.    Meet the minimum monthly or annual income requirement specified by the lender either individually or jointly with a co-applicant or spouse. 
4.    To select a suitable car loan offer, compare several car loan deals across lenders. Choose a loan offer with a low interest rate and flexible repayment options. 
5.    Choose a car within your means so that you can comfortably repay the loan on time. 
6.    Put at least 20% down payment on the total price of your car. 
7.    Find out the monthly and total cost of your car loan using an online car loan EMI calculator. Based on the calculation, create a budget and strictly adhere to it. 
8.    Banks offer pre-approved car loans to existing customers and those who work with reputable establishments. Feel free to opt for instant car loans but do some prior research. 
9.    Keep the necessary supporting documents ready when applying for a car loan. 

Always do some research before going ahead with a car loan application, thereby ensuring loan approval and not loan rejection.

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