Complete Guide to Required Documents for an Auto Loan in Nepal

Owning a new car has always been a dream that is so exhilarating to have it come true. Just think about it, a car is a means of getting the freedom and the comfort that you will have whether via it, you are going to have family vacations, business, or daily trips around the city. For the majority of people, taking care of the finances through an auto loan is the best way to handle this kind of purchase. But the application can feel overwhelming, particularly when it refers to the procedure of the paperwork gathering.

Fast and efficient auto loan approval depends to a large extent on readiness and documentation. By presenting to the bank your set of documents that is not only complete but also is well-organized, you are telling the bank that you are a dependable and serious seeker. This guide provides a detailed and systematic breakdown of the documentation required to secure an auto loan in Nepal, categorized by the purpose of the documentation for purchasing car through auto loan.

1. Identification and Verification Documents

The identity and address along with other relevant information depending on the nature of the business are the expected legal entity documents that must be presented by applicants and guarantors as a minimum.

• Photograph: Two recent passport-sized photographs of the applicant and any guarantors.
• Citizenship Certificate: A copy of the citizenship certificate of the applicant and any guarantors.
• Relationship & Marital Status Documents: A Relationship Certificate or Marriage Certificate is required as applicable to establish the legal relationship between applicants and guarantors.
• Business Entity Documentation (as applicable): For businesses applying for a loan, the following are required:
  • Firm/Company Registration Certificate
  • PAN/VAT Certificate
  • Article of Association (AOA) and Memorandum of Association (MOA)
  • Partnership Deed (for partnership firms)
  • PAN Certificate of the entity.
• Location Map: A clear map illustrating the location of the applicant’s residence and office/business premises for verification purposes.

2. Income and Repayment Capacity Verification

This section is critical for the loan application, as it provides evidence of the applicant’s financial capacity to service the loan. The specific documents required depend on the nature of the income source.

A. Salaried Income

• Salary Certificate: An official document from the employer confirming the applicant’s current salary and employment status.
• Employee ID Card: A copy of the applicant’s official employee identification.
• Bank Statement: Statements for a period of at least six months from the account where salary is deposited.
• Tax Deducted at Source (TDS) Records: Evidence of income tax payments.

B. Pension Income

• Pension Certificate (Patta): The official pension certificate or record book.
• Bank Statement: A minimum of six months of bank statements showing regular pension credits.

C. Foreign Income

• Valid Passport & Visa: Copies proving legal status in the country of employment.
• Contract Agreement: The official employment contract detailing terms and salary.
• Salary Certificate: An official salary confirmation from the foreign employer.
• Pay Slips: The most recent three months of pay slips, if available.
• Bank Statement: Relevant bank statements reflecting income deposits.

D. Vehicle-Based Income

• Vehicle Registration Document (Blue Book): A copy of the registration for the income-generating vehicle.
• Self-Declaration of Income: A formal declaration of income derived from the vehicle.
• Route Permit: A valid route permit is required for commercial vehicles.
• Reference Letter: A letter from an associated company confirming the vehicle’s income.
• Insurance Policies: Copies of current insurance policies.

E. Rental/Lease Income

• Rental/Lease Agreement: The formal agreement with the tenant.
• Rental Tax Receipt: Proof of tax payment on rental earnings.
• Title Deed (Lal Purja): The land ownership certificate for the rented property.
• Bank Statement: At least six months of bank statements showing rental income.

F. Business Entities

• Audited Financials: Audited financial statements for the last two fiscal years.
• Tax Clearance Certificate: The most recent tax clearance certificate.
• Bank Statement: A minimum of six months of statements from the primary business account.

3. Vehicle-Specific Documentation

These documents pertain directly to the vehicle being financed, which serves as the collateral for the loan.

• Vehicle Quotation: An official price quotation from the dealer for a new vehicle.
• Vehicle Valuation: A valuation report from a bank-approved surveyor for a used vehicle or for refinancing.
• VAT Bill: The final purchase invoice of the vehicle.
• Insurance Policy: A comprehensive insurance policy naming the lending institution as a beneficiary.

4. Supplementary Documentation

There is the possibility that, depending on the bank or financial institution, more documents may be requested in order to complete the verification process in relation to the applicant; based on the applicant’s profile.

Every borrowing is governed by the rules and regulations of the respective credit institution.