HDFC Bank Car Loan Review

HDFC Bank has finance plans for a wide variety of cars and multi-utility vehicles in India. The bank offers loans up to 90% of the invoice value of the vehicle but the minimum amount one can avail is Rs 100000. For some car models, the bank offers 100% finance options too. Another case in which the bank may cover the full cost of the new car is for customers who have fixed deposit with the bank in which case installments may be paid separately or out of the deposit if the latter is large enough.

Eligibility conditions

Both salaried and self employed people can avail of HDFC New Car Loans. If you are a salaried professional, you need to be at least 21 years old or less than 60 at the end of the loan tenure. Also you need to be employed for two years of which one year must be in your present position. You need to have net annual income of Rs 100000 as well as a residential telephone. In case of self employed individuals, one has to be between 21 and 65 years of age before the loan tenure is over to be eligible for new car loan from HDFC Bank. Moreover, you need to be in business of at least three years and will be required to show net annual profit of Rs 60000 for standard cars as well as net annual profit of Rs 100000 for mid-size and premium cars. You also need to need to have a telephone at your residence.

Among others who can apply for new car loans from HDFC Bank are Partnership Firms, Public and Private Limited Companies, Hindu Undivided Families as well as Trusts. The first three are required to have a minimum net profit of Rs 60000 for standard cars and Rs 100000 for cars from mid-segment and luxury segment. Other than this, the companies need to show an annual turnover of at least Rs 4.5 lacs and the presence of one phone at business premises. For partnership firms, the loan executing partner too needs to possess a residential phone.

Documentation Required

For salaried professionals, the documentation necessary to apply for HDFC New Car Loan includes:

• Proof of identity which can be a copy of the Passport/ PAN Card/ Voter’s ID card/ or Driver’s Licence. In case of the latter, the card should be recent, laminated and legible.
• Income Proof which include the most recent salary slip and Form 16.
• Proof of Address as present in any one of the following: Ration card, Driving licence/Voters card/passport copy/telephone bill/ electricity bill/Life insurance policy/ PAN Card.
• Bank statement is not necessary for salaried professional who possess all the above documents.

Self-employed people need to bring the following documents in order to avail of new car loan from HDFC Bank:

• Proof of identity which can again be a copy of the Passport/ PAN Card/ Voter’s ID card/ or Driver’s Licence. According to bank regulations, the copy of the Driver’s Licence needs to be recent, laminated and legible.
• Income Proof of the applicant. For self-employed professionals, this will be latest Income Tax Returns.
• Address Proof for which one can opt from a copy of Ration card/Driving licence/Voters card/passport copy/telephone bill/ electricity bill/Life insurance policy PAN Card.
• Bank statement when applying for loan to finance mid-size and luxury segment cars. In case of loan for small cars, one need not produce bank statement. Again if the applicant’s annual income is more than Rs 1.5 lacs, then this requirement may be waived according to the discretion of the bank.
  

HDFC Bank claims quick processing of all new car loans. According to the information on bank’s website, it will take only 48 hours to approve new car loans after all the documentation is complete. Other than this, customers who have a Preferred Account or a Corporate Salary Account with HDFC will have the privilege of speedy loan processing provided all the necessary documents are present.

HDFC Bank offers its customers a range of repayment options suited to their convenience and financial resources. The tenure of the loan products can vary from 12 to 84 months for new cars and the borrower can even pre-pay the loan any time after six months of availing the loan. However there is a pre-payment fee on the outstanding loan amount. This fee ranges from 6 % of POS for preclosures within 1 year from first EMI to 5% of POS for preclosures within 13-24 months from first EMI and 3% of POS for preclosures after 24 months from the first EMI.
In certain cases, like the applicant’s income falling short of the minimum requirement, the applicant for HDFC New Car Loan may need to produce a guarantor who will stand surety for the loan. However, if the applicant meets all the income requirements of the loan, a guarantor is generally not required.

The website of HDFC Bank does not explicitly mention the range of interest rate it charges on new car loans. However it does state that existing account holders with HDFC can avail of ‘special rates’. Among other benefits for HDFC account holders are an Auto Takeover Plan where they can apply for new car loan if they have at least a 9 month old loan with approved financier and clear loan repayment record. Holders of HDFC International Credit Card or several other Gold Credit cards can also have their new car loans approved at a faster rate. In some cases HDFC Bank allows income proof to be waived for new car loans – like in loans where the maximum amount is 60% of the car invoice value and which has to be repayed within three years.

The processing fees for HDFC New Car Loans are Rs 2150 up to loan amount of Rs 2.5 lacs, Rs 3150 from Rs 2.51 to 4 lacs and Rs 3650 for amount above Rs 4 lacs. Late penalty payment is two percent per month.

Other than offering attraction finance options for new cars, HDFC Bank also has loan products for used cars. The eligibility and documentation required for used car loans are much the same as those for new car loans. However loan amount for used cars cover 80% of the value of car and the loan tenure is from 12 to 60 months.

The HDFC Bank website has an online application form for new and used car loans. Other than this those interested in knowing more about the car loan products can contact the bank on phone or visit the nearest HDFC Bank branch.