How to get pre-approved for a Car Loan?
3 min read
Mar 15, 2024
The fascination of driving a new car can be strong, and the idea of securing a Car Loan approval in minutes, even more so. However, while some lenders advertise instant Car Loan approvals, it's essential to understand the process and avoid potential pitfalls. A minimum CIBIL score for a Car Loan is a key consideration that expedites the approval process.
While instant approvals may involve automated checks based on basic information, a thorough review is still required, which can take several business days. Additionally, meeting the minimum CIBIL score, typically around 750, is crucial for even qualifying for an instant approval. Let us understand this process in detail.
What is a pre-approved Car Loan?
When it comes to Car Loans, instant approvals often refer to pre-approved loans. Pre-approval is an estimated decision based on the information provided during the application stage. It gives you an idea of whether you are likely to be approved for a Car Loan.
However, it's important to note that pre-approval is not a guaranteed approval. Lenders still need to verify your income, employment details and other factors, such as minimum CIBIL score, through a full approval process that typically takes several days.
For example, Axis Bank's 24x7 Car Loan scheme offers a convenient and efficient way to finance your car purchase. If you're looking to buy a new car, Axis Bank allows you to get a pre-approval for a Car Loan online. This means you can find out beforehand if you're eligible and what loan amount you might qualify for.
The application process is simple and can be completed entirely online through the Axis Bank app or Net Banking. For pre-qualified customers, the entire process is largely paperless, requiring minimal documentation. This saves you time and hassle compared to traditional loan applications.
Axis Bank offers flexible loan options, including funding for up to 100% of the car's on-road price. You can choose a loan term that best suits your needs, with options ranging up to 7 years.
Benefits of car finance pre-approval
Shopping for a car can be exciting, but navigating the world of car finance can feel overwhelming. Pre-approval for a Car Loan offers a solution, empowering you to make informed decisions and secure the best possible deal. The benefits of pre-approval include -
• Instant fund disbursal
No more waiting around for loan approval! Once you find the car of your dreams, pre-approval allows for faster access to funds, streamlining the purchase process. While pre-approval doesn't guarantee final loan approval, it gives you a good sense of your eligibility. Generally, lenders in India require a minimum CIBIL score for Car Loans that can be 750 and above.
• Documentation-free
Pre-approved Car Loans often require minimal documentation as most verifications are completed during the pre-approval stage. This saves you time and hassle at the dealership. When it comes to minimum CIBIL for a Car Loan, a higher CIBIL score, ideally above 750, can lead to better interest rates and loan terms.
• Maximum funding
Pre-approved Car Loans offer maximum funding options as the amount is determined based on various factors like credit score, income level and existing debts. Pre-approved Car Loans provide greater clarity on your borrowing power. Knowing the maximum loan amount you qualify for empowers you to negotiate effectively and make informed decisions when choosing your car.
How to get pre-approved for a Car Loan?
• Gather information and documents
To get pre-approved for a Car Loan, it's important to have all the necessary information and documents ready. This includes your pay slips, bank statements, proof of residence and identity proof. Ensure that you have a minimum CIBIL for a Car Loan.
• Collect pre-approval offers
Before applying for a Car Loan elsewhere, it's worth exploring pre-approval offers from your existing bank or credit union. They may have pre-approved loan offers readily available online or through mobile apps. Here, remember the minimum CIBIL required for a Car Loan. A higher CIBIL score typically translates to a higher pre-approved loan amount. So, working on improving your credit score can significantly increase your purchasing power.
• Car shopping
While waiting for your pre-approval, take the time to research and compare different car models, prices and features. Use online platforms, dealerships or car aggregators to find the best deals on your chosen vehicle.
Auto Loans: Pre-qualification vs pre-approval
It's important to understand the difference between pre-qualification and pre-approval processes when it comes to Auto Loans. Pre-qualification provides an estimate of the loan amount you may qualify for based on your creditworthiness. On the other hand, pre-approval is a more comprehensive process that involves income verification and a detailed assessment by the lender.
[Also Read: Finding your way to a Car Loan with low CIBIL score]
Wrapping up
Getting a Car Loan can be an exciting step, but it's important to approach the process with realistic expectations and practice responsible borrowing. By understanding the nuances of instant approvals, taking steps to potentially expedite the process efficiently, and prioritising your financial well-being, you can navigate the Car Loan approval journey with confidence.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision
