You are not alone if the current economic conditions have made it impossible for you to keep up with your finances. The Covid-19 crisis has triggered widespread job losses and significant decreases in overall revenues of businesses. Loans serve as an invaluable gateway to bring us closer to achieving our financial objectives, be it buying a home, a car, or taking care of the higher education of your child.
In the past, owning a car used to be a huge deal. Also, it was a lengthy process that required a lot of documentation. Today, one can book a car within a few days and drive it back home without much hassle. As you know about the current social distancing norms, it is not safe to travel via public transport. Therefore, owning a car has become all the more crucial. If you plan to take a car loan, you must also check your car loan eligibility to avoid loan rejection later.
Checking your car loan eligibility is essential as several loan rejections can negatively impact your credit score. Lenders review your credit score and credit report at the time of approving a car loan application. So, what happens if you check your car loan eligibility online, and you are not eligible for a car loan?
Here are a few ways in which you can improve your car loan eligibility:
- Enhance your loan tenure
The most efficient way to improve your car loan eligibility is to opt for a longer-term or tenure. It is because, at the same interest rate and principal amount, a longer-term will result in lower monthly payments. Lower EMIs improve the payment capability and car loan eligibility of the borrower. It is also advisable to use a car loan EMI calculator to check what your monthly EMIs will be and plan them better.
- Improve your credit score
Before granting a car loan, your individual credit score is thoroughly reviewed by the bank. It reflects your creditworthiness and is required for the right interpretation of your financial situation. It would be easy for you to get a car loan if your credit score is good. Paying your credit bills on time and minimizing debt can significantly increase your credit score.
- Maintain a stable income
The total loan amount which will be granted to you will depend on your level of income. Besides your credit score, income is another crucial factor. A higher and stable income reflects that you are financially capable of paying back the car loan amount. It convinces the lender of your ability to repay the amount and increases the chances of loan approval to a great extent.
- Apply with a co-applicant
You can also opt for a joint loan with a co-applicant in case of insufficient income or low credit score. This would enhance your overall car loan eligibility and boost the chances of approval. Adding a co-applicant can also enable you to avail of a higher loan amount. Make sure to pay back on time as delay in repayment can adversely affect your credit score of both you and the co-applicant.
Use a Car Loan EMI Calculator
A car loan is a popular financing tool for owning your dream vehicle. However, you need to cautious and prudent when it comes to managing the loan—especially the repayment of the loan amount. Make sure to plan the repayment efficiently by using a car loan EMI calculator. Banks like Axis Bank offer affordable car loans with a tenure of up to 8 years. You can apply for a car loan online at attractive interest rates.
