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 fulfil your all wishes. Loan against Car is a scheme that can help you to get money 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 bought after 2009, you can easily get funds from the banks and NBFCs.
- Banks and NBFCs will do the valuation of the car, and the 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 for Loan against Car, as this product doesn’t have complicated rules like personal loans. For example, if you are looking for a Business Loan against only a 1-year-old business, you can’t get it due to the rules of the banks. But you can get a Loan against Car easily to satisfy your financial need. Banks can also take deviation in the case of Credit History and ITR filed.
- Loan against car costs less than 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 the model and vehicle segment.
- If your car is already financed and you want a loan against that car, you can avail of the loan from financial institutions. Different banks and NBFCs offer Loan against Car, which is already financed.
- To get Finance against your car, you must have the RC or Insurance documents of the car.
Your car is your wealth. Consider all key points and get Loan against Car to satisfy all your financial needs. Before applying, you must check the car model and the segment. It is more beneficial if your car is not older than 1 year. You will get more loan amount and easy approval.
Check the Car Loan interest rates here
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