What is the GST Impact on Car Loan
The biggest tax reform bill introduced in the Indian history, Goods and Service Tax has affected the life of common man in many ways. From daily goods to banking products & financial facilities, GST impact can be seen on everything attached to the life of people. If we talk about the financial products, the changes made covers the loan segment as well.
Though the interest rates of the loans have not been changed, the service tax have increased by 3%. The service tax of 15% is now replaced with the 18% GST rate. So now the borrowers have to pay the difference of 3% extra on the credit availed.
The GST impact on car loan is the same. There is no modification in the CL interest rates. So, the aspirant buyers need not worry about their EMI and go on with their plan to buy the car. Even the implementation of GST has resulted in deduction of prices of certain car models.
This may be right time for the people who are planning to get hold of the luxury cars. And with the availability of car loan it becomes even more easy to get the funds arranged for the purchase of the new car. There are various lenders that are offering this facility.
Car Loan eases the burden of huge payment by allowing the customer to get the car and pay for it later in installments. Getting car financed is a better option than one time payment as it doesn’t hit your budget and affect overall monthly expenses. Therefore, availing a loan will be the better option for people having moderate income.
To get the CL from any of the banks or financial institute, the customer has to submit the application form along with the requisite documents. It is after the verification of the documents that the loan is approved. The application form and list of required documents is provided below:
Car Loan Application Form
To avail the advantage of CL, the potential buyer has to fill the application form of the particular bank or the financial company. The application form can be filled either online or offline. The customer can visit the nearest branch. Or the entire application process can be carried online. Login the official website of the particular lender and fill the online application form. The form comprises of the following sections:
- Personal Details
- Income Details
- Loan Details
- Details of car model
- Details of co-applicant
Documents Required for Car Loan
Along with the application form the customer has to submit certain documents that are used for verification. The following documents are requisite documents:
- Age proof
- ID proof
- Application form
- Residence proof
- Income proof
- Bank statement
- Signature verification proof
- Pro-forma Invoice or Rate List
It is also advisable that the customer must check the eligibility criteria before applying for the loan and compare the interest rate offered by various lenders. Each bank has predetermined norms for approving the application. If the customer’s details are as per the standards set by the bank the application is approved. Though the particularity may vary from bank to bank, the bases remain the same. The factors on the basis of which eligibility is decided:
- Income of the applicant
- CIBIL Score
- Debt to income ratio
- Loan amount & down payment
- Age of the vehicle
- Loan tenure
Goods and service tax has brought no major change in the car loan industry except for the rise in the service tax. The people postponing or cancelling their plan of buying a car worrying about GST impact on car loan may stick to their old idea and fulfill their wish.