What is a Car Loan?

A Car Loan is extended for the purchase of a passenger four-wheeler car.

Can a client get 100% funding to buy a new car?

Yes. Pre-approved customers can avail 100% of the on-road price. However, the on-road price should be equal to or less than the offer amount.

For non-preapproved customers, 100% on-road funding is possible basis the merits of the case like income, stability, FOIR, CIBIL, and internal checks.

What is the maximum loan amount that can be availed for a new car?

As no upper limit is prescribed for the maximum loan amount, it will depend on the cost of the vehicle

What is the loan tenure to buy a new car?

The tenure ranges from 12 months to 84 months to secure a loan for a new car.

What are the eligibility criteria to apply for a Car Loan?

Anybody can apply for a Car Loan excluding customers below the age of 18 years, customers declared as defaulters by the RBI, and applications from countries excluded by the OFAC.

What is the minimum credit score to get a Car Loan?

The credit score is one of the key factors to get a Car Loan approved. However, it would also depend on other parameters and on the reason why the applicant has a low credit score.

How much down payment needs to be made to buy a car?

The down payment would vary from car to car. However, before the disbursal of a Car Loan, a margin money receipt is required from the car dealer.

What are the documents required for a Car Loan?

2 sets of documents are required for a Car Loan:

  • Pre-approval documents

  • Post approval documents.

Pre-approval documents:

  • Photograph

  • Application form

  • Performa Invoice

  • KYC documents (Identification, Address, and Signature Verification)

  • Banking documents (Salary Account documents for salaried customers and Current Account documents for entities and the self-employed)

  • Income documents (Salary Slip/ITR/Form 16)

  • Relationship proof in the case of a co-applicant

  • Partnership deed in the case of partnership companies

  • MOA or AOA in the case of companies

Post-approval documents:

  • Agreement Kit

  • Insurance

  • Margin Money Receipt

  • Partnership Authority letter in the case of partnership firms

  • Board resolution in the case of companies

When applying for a Car Loan, is a guarantor required?

This would depend on the merits of the case. Generally, co-applicants are preferred in Car Loan cases and the Guarantor can be taken if required.

What are the lending rates for Car Loan?

The lending rates vary on the basis of car models and the tenure selected.

What is a Monthly Reducing Balance in Car Loan?

In the case of the monthly reducing balance method, the principal gets reduced at the end of every month and the interest is calculated on the outstanding principal at the end of the month.

Can a client foreclose or prepay Car Loan?

Yes, a client can foreclose or prepay the Car loan. There is a prepayment fee of 5% on the outstanding principal amount and the goods and Services Tax will be charged as applicable on the pre-payment fee.

To facilitate the prepayment of the Car Loan, we need to process the request and the following documents will be required: 

  • Pre-payment Statement

  • Request letter signed by the loan applicant

  • Bank statement reflecting the clearance of the last installment

  • PAN Card (If the closing cash payment is more than Rs.50,000)

  • Vehicle Registration Certificate (R C Book Copy)

  • Vehicle Insurance Copy

  • Mode of payment can be cash, cheque, or demand draft

Please note that 18% Goods and Service Tax (GST) w.e.f. July 1, 2017, will be applicable.

How do I repay the Car loan?

The loan can be repaid through Post Dated Cheques drawn on ICICI Bank Ltd. Alternatively, if the client has a Bank account with ICICI Bank, can issue a direct debit mandate, to the existing ICICI Bank account or even opt for an ECS option for the repayment.