Car Loan with Minimal Documentation: Here’s How You Can Get it

Key Highlights:

• Pre-approved car loans are the fastest to approve, as they require only proof of one address and a PAN card.
• Borrowers with credit scores of more than 700 have higher chances of faster loan approvals.
• Besides pre-approved car loans, standard car loan approvals usually take at least one day, even with minimal documentation.

Remember the days when the process of availing a car loan was more prolonged and tiring? While they can still be lengthy in some cases, applying for a car loan has become much smoother and more hassle-free than before, thanks to better awareness of various parameters and the digitisation of several processes.

Here, we will share some techniques you can use to get a car loan faster with minimal documentation, regardless of your situation. This will make the entire process more convenient.

How to Get a Car Loan with Fewer Documents

The traditional way of applying for a car loan requires the borrower to submit all personal and financial documents, including two or more forms of identity proof, a detailed statement of income, tax returns, and additional supporting documents. However, in several cases, banks and financial institutions ease off this process by requiring fewer documents, including only basic identity and income proofs.

With minimal documentation, the verification process becomes shorter, making the disbursement process quicker and more convenient. However, there are some conditions that need to be met to avail a car loan with fewer documents, which are as follows:

Age requirements: Typically between 21 at the time of application and 60 at the time of loan maturity, with different banks offering various age categories for faster approvals.

Income statements: These vary for different types of working professionals – a stable job with at least 6 months to 1 year of employment for salaried professionals, and business income of at least 1-2 years for self-employed and business professionals. Banks even require a minimum salary requirement for loan processing for salaried professionals, which can vary between banks.

Credit score: Ideally, it should be 700 or above, as this gives lenders more confidence from the outset.

Residential status: Borrowers with valid, self-owned permanent addresses have higher chances of faster loan approvals.

Existing loans: The fewer the number of existing loans, the faster the disbursal process will be.

Usually Required Documents

Even though car loans with minimal documentation are faster to process, they still require a minimum number of documents as must-haves, which are as follows:

• Identity proof: Aadhaar card/PAN card/passport/voter ID card
• Address proof: Aadhaar card/passport/ electricity bill/rent agreement
• Income proof: Last 3-6 months’ salary slips (for salaried people), income tax return of last 1-2 years (for self-employed/business professionals) and recent bank statements (common for all)
• Vehicle details: Authorised quotation from the dealer (with required sign or seal) and booking receipt
• Passport-sized photographs

All these documents must be submitted by the borrower to the bank's representative or uploaded to the bank's online portal. Afterwards, the banks will check eligibility, based on which the loan application will be processed.

If all documents are okay and well-aligned, and the conditions for faster disbursal are met, the loan disbursal process will be quicker, usually taking no more than 1 day. However, in case of a pre-approved offer from a bank, the entire process requires only an identity or address proof and a PAN card, and the disbursement will happen within minutes.

Key Factors in Getting a Car Loan with Minimal Documentation

As is evident, car loans with minimal documentation are faster and more convenient, requiring less paperwork and focusing more on digitised processes. However, eligibility and good credit scores matter the most – the better they are, the faster the application and disbursement process of the loan amount will be. It is also essential to have the correct set of documents; while they are minimal, they should be precise and strong enough to support the preparation and process.

FAQs

1. Can we get a car loan without proof of income?
Only pre-approved car loans do not require income proof, as they are usually offered after processing the previous track record and credit score.

2. Which document is required for a car loan?
The documents required for a car loan include identity and address proofs such as Aadhaar card, passport and electricity bill, PAN card, income proof – last 3-6 months’ salary slips (for salaried people), income tax return of previous 1-2 years (for self-employed/business professionals) and recent bank statements (common for all), authorized quotation of car model from the dealer (with required sign or seal) and booking receipt.

3. What is the CIBIL score for a car loan?
Borrowers with CIBIL scores of more than 700 have higher chances of faster loan approvals. However, for borrowers with lesser credit scores, more documentation and meeting certain conditions are required, which might take some time.