How Can I Get a Loan Against Car?

Securing a personal loan using assets is a common practice, and one such asset is your vehicle. If you're facing financial challenges, maintaining a car can add to the strain. Utilizing your vehicle to secure a loan can be a viable solution.

When applying for a loan against your vehicle, the lender typically assesses its current market value through an expert. Most lenders extend loans amounting to 70-85% of the determined car value. Upon loan approval, the lender gains ownership of your car, prohibiting its sale until the loan is repaid. Repayment terms vary by lender, with some offering up to two years. Early repayment may incur penalties, depending on the lender's policy. 

To know how can I get a loan against my car, continue reading.

What is a Loan Against Car?

A loan against a car is a type of secured loan in which the borrower pledges their vehicle as security to get money from a lender. These loans are sometimes referred to as vehicle equity loans or car title loans. Until the loan is repaid, the lender retains ownership of the vehicle. If the borrower defaults, the lender may seize the vehicle and sell it to recover the unpaid balance.

Key Features of Loan Against Car

The following are five characteristics you must know when wanting to know how do I get a loan against my car:
• By using the car as collateral, borrowers can get loans depending on the value of the vehicle.
• Applications for loans secured by cars are usually processed more quickly than those for unsecured loans.
• Depending on the borrowers' financial circumstances, lenders frequently provide various repayment choices.
• Because the loan is secured, those with bad credit can still be eligible.
• Should you default on the loan, the lender has the right to seize your automobile in order to recoup the balance owed.

Benefits of Loan Against Car

Here are five advantages of taking out a loan secured by a vehicle:
   

• By using the car's worth as collateral, you may quickly be approved and get money, taking care of any urgent financial demands.
• Flexible repayment terms are frequently offered to borrowers, enabling them to customise the repayment schedule to suit their financial situation. 
• Since the loan is secured by the car, lenders are not required to do thorough credit checks, making it accessible to those with bad credit.
• Throughout the loan, borrowers usually maintain ownership and use of the car while utilising it as collateral.
• Because collateral is given, loans against automobile choices may have lower interest rates than unsecured loans, which might cut total borrowing expenses.

Eligibility Criteria for Loan Against Car

• Applicants for the loan must be between 21 and 60 to 65 years old at the time of application.
• Both salaried individuals and self-employed persons are eligible to apply for the loan.
• A reasonable income is necessary for loan eligibility.
• Generally, loans are granted only for cars aged below 10 years.

Documents Required for Applying for Loan Against Car

To know how to get a loan against your car, here are the most frequently required documents:
• Identification proof: Voter ID, PAN card, passport
• Age verification: Same as above
• Income proof: Salary slip, bank account statement, and Income Tax Return (ITR)
• Address confirmation: Telephone bill, passport, and photo ration card
• Car-related documents: Driver's license, vehicle registration document, and car insurance certificate

Rate of Interest Offered by Top Banks on Loan Against Car

Fees & Charges on Loan Against Car

Fees and charges related to loans against cars include any additional expenses that may arise when you want to know how to get a loan against a vehicle. 

How to Apply for a Loan Against Car?

• After conducting thorough research and selecting the preferred lender, you have two options: visit the nearest branch or apply through their website. 
• For comparing offers, online aggregators are available. 
• Upon finalizing the lender, you can proceed to apply on their website. 
• The lender will guide you through the application process and provide details. 
• You may complete the application and document submission online or offline, depending on the lender's services.

Conclusion

Once you've confirmed your eligibility for a loan against your car, begin your search for reputable lenders. Take the necessary time to compare various loan providers to identify the most suitable option for your needs. Ensure that you optimize your benefits by selecting the most favorable terms.