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By ANOOP BANSAL 1,593 views

Buying a Car on EMI for the First Time?

The thought of buying your four-wheeler is itself quite exciting. A car cuts down your hassles and extra expenses while improving your social status. But what if you can’t afford the car that you desire to own? You can’t spend all your principal income on a car all at once. In such a situation, it is EMI comes to help. It is an easy monthly installment option that you need to repay the car amount. But when you are availing car on EMI for the first time, it is very essential to know car financial basics before you take the plunge. Here is your guide on how to avail EMI.

State bank and HDFC bank are leaders in this segment, HDFC Car Loan EMI Calculator a suitable option to calculate what EMI plan to go for depending on your income, it also helps you with details regarding car loan plans.

For Buying A Car On EMI You Should Keep These Basic Details In Mind :

A Valid Bank Account :

The first and foremost important thing to purchasing a car on EMI is to have a proper bank account with acceptable transactions, a good profile and adequate balance. You should be either salaried or a self-employed individual with at least 2-3 years of work experience. The bank checks your CIBIL score before sanctioning the loan.

Age Proof :

You should be of at least 18 years of age and should provide a supporting document that states a higher age properly. It could be a driver’s license, passport, ration card, or any other government document that mentions your legal age.

Valid Documents And Address Proof :

Principle documents required for buying a car and applying for EMI are Aadhar card, Pan Card, Bank statements (of last 3 months), two copies of photograph, ideally two passport size photos for validation and signature verification proof is also required.

Know Your Budget :

It is very important to know your budget to decide what car and which EMI plan you can afford, there are divergent EMI plans with various options for a down payment. The company suggests you what EMI plan to go for depending on your income, the rate of interest varies from plan to plan. The sellers also have various EMI options under their bank account with more schemes, thus they can help you if required. You can also check your bank’s official sites that provide with  Car Loan EMI Calculator.

Get Approval First :

The bank takes 1 to 5 days to approve the car loan for EMI, they might differ from bank to bank and also the liability of the customer.

Repayment Tenure:

Usually, a borrower can choose an EMI plan repayment from 1 to 7 years, depending on their ability to repay. The tenure can be extended in certain cases.

Add-Inn an EMI Protector To Your Insurance Policy :

There are many benefits in adding an EMI protector scheme for the car loan EMIs like if your car is totaled or destroyed and you sustain injuries that require hospitalization for a long time then EMI can be partially paid by mother policy.


To purchase a car on EMI is more desired, even if one has enough money to buy a car they should not use all of their principal amounts all at once. The principal amount could be used elsewhere too, or to repay the money later. This also creates a good record for your bank account profile.

Cut Down Your Unnecessary Expenditures:

Once your EMI documentation is done, the car can be brought home but then the greater deal begins, the start of car loan EMIs. EMI needs to be paid on time to remain stress-free, a missed EMI starts a formidable debt, it also puts your financial future in jeopardy and most important it affects the CIBIL score. Thus it is necessary to cut down on unnecessary luxury expenditures. Timely payment increases credibility with the bank.

Anoop Bansal

I am Anoop Bansal, a professional Chartered Accountant based in the National Capital - Delhi. I have worked for the top-notch Indian and International banking firms for the past 10 years. Currently, I work as a writer and a financial consultant for different SMEs in India.