Car Loan Eligibility Criteria

Car Loan Eligibility Calculator

Note: Loan eligibility criteria differ depending on a bank/lender. Approvals are based on borrowers' incomes, credit profile and existing relationship with the bank.

Car Loan Eligibility Criteria Across Top Banks in India (2025)

While applying for a new car loan, you will need to meet certain eligibility criteria and these requirements can differ from lender to lender. Let us take a look at the requirements for some of the top lenders:

How to Improve Your Car Loan Eligibility?

Some of the different ways by which you can improve the car loan eligibility are mentioned below:

1. Improve the Credit Score: Your credit score is one of the most important factors that is considered when you apply for a car loan. Ensure you pay all bills on time so that your credit score is good. Having a good credit score will ensure that loans are provided at low interest rates.

1. Co-Applicants: Adding a co-applicant will increase the chances of you getting a car loan. Having a co-applicant will show that the loan can be repaid on time.

1. Clear Existing Debts: Make sure all outstanding payments are cleared. The debt-to-income ratio will be high if all debts are cleared.

Factors Affecting Car Loan Eligibility

1. Credit Score: Lenders check your credit score in order to assess your repayment capacity and your repayment behaviour for your previous or existing debts. If you have a credit score of 750 or above, your lender will be of the opinion that you are responsible about repaying your loan on time and hence, will most likely approve your loan application easily. 

1. Type of Car: The type of car that you want to buy with car financing will determine your car loan eligibility. Each car model will have a particular resale value as per the features and specifications of the car. 

    Hence, if the resale value of the car that you want is high, then your car loan eligibility will also be high. Since a car is an asset whose value depreciates with time, the resale value is taken into      consideration in order to determine the eligibility. 

1. Employment status and longevity of business for applicants: If a salaried employee is applying for a car loan, he or she should have been working in his or her present company for a minimum of 1 year and should have been working for a minimum of 2 to 3 years. If the applicant is a self-employed person, they should have been in the same business for a period of at least 2 to 3 years. 

1. Income of Applicant: When you apply for an auto loan, your lender will check your income levels in order to assess if you can pay the EMIs on time or not. If you have a higher income, the lender will be of the opinion that you can repay easily without any difficulty.  

    However, if your income is slightly on the lower side, then your lender may be doubtful if you can pay every car loan EMI on time. Hence, the lender may give you a lower loan amount. 

1. Your Employer's Reputation: Sometimes, the company that you work for will help in improving your car loan eligibility. For example, if you are an employee at a Fortune 100 company or any other company that is ranking well, then your loan eligibility will improve. 

     This way, you will be able to receive a higher loan amount to finance the purchase of your car. On the other hand, if you are not working in any such company, then it is important that you           earn a high income in order to get a higher loan amount approved. 

1. Relationship with Your Lender: If you already have an account with some bank and if you have a good relationship with this bank, then you can negotiate with them to get a higher loan amount approved at a lower rate. 

A good credit score can help you secure lower interest rates on loans and credit cards.

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