A Personal Loan vs a Loan against Car has significant distinctions. A personal loan and a car loan both allow us to borrow money from banks. But they are not similar, they are quite varied. There are so many banks that offer you with a Personal Loan vs a Loan against Car. We can use the number of loans to fulfill our personal needs or to get financial aid in our financial status. In both types of loans, the bank provides you with some amount of loans at some rates of interest. But there are some differences. Before that, we should know about a Personal Loan Vs a Loan against Car.
Basically, a personal loan is a loan where we borrow money from the bank for our personal use of interest rates. There are so many banks and non-banking financial companies that offer us a personal loan. A Personal Loan is easily accessible. Moreover, it is an unsecured loan. It means that a personal loan does not need any security or collateral. There is no requirement to pledge your property as security. If you are earning well then you can easily avail of a personal loan.
Eligibility Criteria for Personal Loan
There are some personal loan eligibility criteria regulated by every bank to provide a personal loan to the bank. Let us know about them
- First of all the age of the applicant must be 21 years.
- He/she should have a good source of income.
- His/her CIBIL score should be good.
- He should be a citizen of India.
- His/her salary should be more than Rs. 20000 at least.
- If he/she is self-employed he/should has been paying ITR of Rs. 2.5 Lakhs for the previous three years at least.
Eligibility Criteria for Loan against Car
In loan against car also we borrow money or cash from the bank, but this loan is given against your car. If you wish to borrow some money from the bank then you can use your car as well. You can utilize this amount of loan for your personal use also. Besides that, you can use this amount of loan to purchase a new car too. But there are some conditions to avail of this loan. Let us see them.
- First of all the age of the applicant must be at least 25 years.
- After that, the car against which you are willing to avail of a loan must not be older than 8 years.
- There is one more condition is that the company must be still manufacturing that car model.
- The amount of loan sanctioned by the bank would be 85% of its value after valuation.
Difference between A Personal Loan Vs A Loan against Car
In a loan against the car, you will get the loan amount according to the condition after valuation. The amount of the loan would be 85% of its value after valuation. In case of a personal loan, you will get a loan on the basis of your earning.
Similarities between A Personal Loan Vs A Loan against Car
In both loans, you take money from the bank or non-banking financial company. Both loans let you use the amount of loan sanctioned for your personal needs. You are not answerable to the bank about the utilization of the loan amount.
It is essential to understand the differences between a personal loan vs a loan against a car before taking any loan.