For you, your car is a medium to cover your daily journeys. You use your car to commute from home to office, to drop your family members, to go for a hangout with your friends and to cope up with any emergency. What if you can earn money by using your car? Have you ever thought about getting finance with the help of your car? Your car can act as the “Magic Lamp of Aladdin” which can fulfill your all wishes. Loan against Car is a scheme that can help you to get finance against the car value. If you have a car and you need emergency funds, you can take a loan from the banks or NBFCs. This scheme is also known as “Car Overdraft”.
Must know facts about Loan Against Car: As this product is not widely advertised by banks or NBFCs, people are not aware of the key points of Loan against Car. You must know these points about the scheme:
- If you have a car not older than 2009, you can easily get finance from the banks and NBFCs.
- Banks and NBFCs will do the valuation of the car, and loan amount will be approved according to that value. It may vary according to banks and BFCs. For example, Banks give 80% to 85% finance against the car value, and NBFCs like Tata Capital gives up to 90% finance against the value of the car.
- If you are not getting a personal loan due to eligibility criteria, you can opt Loan against Car, as this product doesn’t have such hard and fast rules. For example, if you are looking for a Business Loan for a business that is only 1-year-old, you can’t get it due to the norms of the banks. But you can avail a Loan against Car easily to satisfy your financial need. Banks can also take deviation in case of Credit History and ITR filed.
- Loan against Car costs lesser as compared to Personal Loan. Interest Rates are from 14% to 17%. For example, HDFC Loan against Car starts at 13.50% whereas Tata Capital Loan against Car starts at 14.75%, and it can go high, according to model and vehicle segment
- If your car is already financed and you want loan against that car, you can avail the loan from financial institutions. Different banks and NBFCs offer Loan against Car, which is already financed.
- To avail Finance against your car, you must have the RC or Insurance documents of the car.
Your car is your money. Consider all key points and avail Loan against Car to satisfy all financial requirements. Before applying, you must check the car model and the segment. It is more beneficial if your car is in the teenage, not older than 1 year. You will get more loan amount and easy approval.