Car financing is the situation where a person/business undertakes to secure credit from a financial institution and then uses the money to buy a car.
Container Relevant Factors defining Car Loan Eligibility
Credit Score: Financial entities confirm an applicant’s credit rating to review and assess their previous as well as current credit repayment tendency and capacity. Credit score above 750 offers higher probabilities of loan approval to the applicants as expressed below.
Type of Car: Automobiles are regarded as fixed investments that deplete in value; therefore, the re-sale value of the car is used in defining loan worthiness. Some of the attributes that make cars easily sells include having good market features or being in high demand. Therefore, those applicants that seek to buy such cars have higher chances of their loans being approved.
Employment Status: What has to be considered is that salaried employees have to have been in their job for at least 2-3 years and in their current company for at least one year. Independent applicants have to have been operating in their current line of business for not less than 2-3 years.
Income: EMI payment capacity is checked with the help of an applicant’s income or job to ensure that he/she won’t default payment. When it comes to issues of income it clearly shows that the applicants with higher average income are most likely to be approved for the loans. Candidates with low levels of income obtain the sums of credit smaller in comparison with candidates with higher levels of income.
Employer’s Reputation: The analysis further shows that applicants who are working in large organizations have a high likelihood of having their loans processed. If an applicant does not work in such companies he can borrow a large amount only if he earns a large income.
Relationship with Lender: This means that current customers of a given financial institution and those with a goodwill relationship can bargain for bigger loans at reasonable cost of borrowing such as lower interest rates.
