Loan Against Car

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Loan Against Car

Loan Against Car

Loan Against Car

The immediate need for cash can arise anytime, such as medical expenses, home renovation, debt consolidation, etc., which can compel you to look for external financial help as soon as possible.

Traditional loan schemes demand a huge time to get approved and granted to the customer. If you have your own car, then you can utilize it in getting a loan. Car Loan is specially designed to support you in a financial crisis.

Under this scheme, the customer places the car as collateral with the lender, and the lender provides the required amount according to the car’s market value. Then, you can use that loan amount to meet your requirements and to cover your expenses.

Best Loan Against Car Plans in 2021 Comparison 

Few of the banks in India that offer vehicle/auto loans, along with information-

Name of Lender Rate of Interest Loan Amount Tenure
HDFC Bank 13.75% to 16% p.a. Up to 150% of the original value of the car
12 months to 84 months
Axis Bank 14.90% to 17% p.a. Up to 50% of the value of the car
12 months to 60 months

HDFC Bank

Lenders like HDFC would lend you up to 150% of the value of your car. The bank does not demand any car appraisal to obtain a loan. You can procure your loan amount in less than 12 hours if you utilize net banking and also if you are eligible for the QuickMoney program.

Key Highlights of HDFC’s Loan against Car-

  • Student loans are up to 2% lower than personal loans.
  • Existing vehicle loan customers who have paid their EMIs on schedule for the last 9 months will receive instant approval.
  • QuickMoney provides immediate disbursement of the loan money.
Lender’s Name Processing Fee EMI (For 5 Lakhs) Part Payment Charges
Pre-Closure Charges
HDFC Bank 1.5% of the loan amount Rs.11,569 (at 13.75% p.a. interest for a 5-year tenure) 3% to 5% of the part-payment amount
Nil – 6% of principal outstanding

Internal Expenses-

  • The Interest Rate on past-due EMIs is 2%.
  • Fees for documentation: Rs.630
  • Charges for collateral: Rs.475
  • Charges for stamp duty: based on current rates

Axis Bank 

Axis Bank provides eligible customers with Loans against Car up to Rs.10 lakh. In addition, pre-approved loans with little documentation and quick processing are provided to the bank’s privileged clients.

Key Highlights of Axis Bank’s Loan against Car. 

  • A loan of up to 50% of the vehicle’s value can be obtained.
  • For Privileged customers, quick processing and minimum paperwork are essential.
  • Privileged customers can get pre-approved loans with low interest rates.
Lender’s Name Processing Fee EMI (For 5 Lakhs) Part Payment Charges
Pre-Closure Charges
Axis Bank 1% of the loan amount Rs.11,632 (at 13.99% p.a. interest for a 5-year tenure) 5% of the Part Payment amount
5% of the Principal Outstanding

Internal Expenses:

  • Fees for documentation: Rs.500
  • Interest on past-due EMIs is 2% per month.
  • Charges for a bounced check or an instrument returned: Rs.500 per instance
  • Actual stamp duty charges

ICICI Bank, Mahindra Finance, and Kotak Mahindra are just a few of the banks and lenders that offer loans against car choices.

How Does Loan Against Car Work?

  • Select an online lender and fill an online application form
  • Fill in your details like your name, age, address, cell number, bank account number, Email ID, etc and submit it online.
  • No faxing of documents or lengthy paperwork is required.
  • As soon as the loan gets approved, the loan amount is instantly transferred to your account.

Features of Loan Against Car

  • Quick and hassle-free processing
  • Fast approval in 3 hours
  • Lower monthly instalments
  • Up to 2% less car loan interest rate as compared to personal loan available in the market
  • Maximum loan based on the assessed car value

Eligibility for Loan Against Car

To obtain the loan amount, a person must meet the Eligibility criteria for the car loan.

  • Minimum age: 21 years
  • Maximum age at loan maturity: 65 years
  • Minimum employment: For Salaried 1 year in current employment and minimum 2 years of employment / For Self- Employed at least 3 years in business
  • Minimum Annual Income: For Salaried Rs 100,000 net annual income / For Self- Employed Rs. 60,000/- p.a.
  • Telephone: Must be at the residence.

Documents for Loan Against Car

Salaried Individual

Category
Documents Required
Identity Proof (Any 1) Passport
Voter ID
Aadhar Card
Driving License
Address Proof (Any 1) Aadhar Card
PAN
Driving License
Electricity Bill
Date of Birth Proof(Any 1)
Passport
Birth Certificate
High School Marksheet
Driving Licence
Signature Proof(Any 1)
PAN
Bankers Verification
Passport
Income Proof
Salary Slip and latest Form No.16
Bank Statement
Last 6 month Bank statement
Employment Continuity Proof
Job card by NREGA
ITR of Form no. 16
Salary Slip mentioned with joining date
Letter of Appointment

 

Self-Employed Individuals

Category
Documents Required
Identity Proof (Any 1) PAN Card
Passport
Voter ID
Aadhar Card
Address Proof (Any 1) PAN Card
Voter ID
Passport
Electricity Bill
Date of Birth Proof (Any 1) Birth Certificate
Passport
Driving Licence
PAN
Signature Proof (Any 1)
PAN
Bankers Verification
Passport
Bank Statement
Bank statement of last 6 months
Employment Continuity Proof
Latest ITRs
Shop & Establishment Act Certificate
Shop & Establishment Act Certificate
Sales Tax or VAT Certificate
Business Proof
Registration Certificate
Telephone Bill/Electricity Bill
Shop & Establishment Act Certificate
SSI or MSME Registration Certificate

 

Self-Employed Non-Individuals:

1. Partnership Firms/Societies

Category
Documents Required
Identity Proof (Any 1) Driving Licence
PAN Card
Aadhar Card
Passport
Address Proof (Any 1)
Electricity Bill/Telephone Bill
Aadhar Card
Driving License
Voter ID
Income Proof
Audited Balance Sheet
P&L Account
ITR for the previous 2 years
Bank Statement Last 6 month
Business Continuity Proof
Company ITR of the last 2 years
Audited Balance Sheet
TAX registration Certificate
Current Account Statement
Additional documents
Letter of Authority or PAN Card

 

2. Private Limited/Limited Companies

Category
Documents Required
Identity Proof
The latest copy of MOA and AOA
Copy of Incorporation
Address Proof (Any 1)
SSI/MSME Registration Certificate
Telephone Bill
Electricity Bill
Shop & Establishment Act Certificate
Sales Tax Certificate
Income Proof
Audited Balance Sheet
P&L Account and ITR for the previous 2 years
Bank Statement Previous 6 Months
Business Continuity Proof
P&L account and
ITR of the Company of the past 2 years
Audited Balance Sheet
Shop & Establishment Act Certificate
Additional documents
List of Shareholding partners and Directors
Board Resolution
PAN Card
Certificate of Commencement of Business for Ltd. Co.

Things to Consider While Getting a Loan Against Your Car

Before you apply for a loan against your car, there are a few things you should know:

  • Most lenders need candidates to have a minimum of 9 months of satisfactory loan payback history. Only if you have paid the EMIs on your previous loan, if any, on time, will your loan be granted.
  • The bank/income NBFC’s criteria must be demonstrated using salary slips and IT Return documentation. Therefore, when you apply for the loan, make sure you have all of the necessary documentation.
  • The amount of a loan you can get against your car is determined by the bank. While some lenders would only give you 50% of the car’s original worth, others may give you 150%.
  • Pre-approved loans from your current bank, where you have a salary account or a loan, may be available with faster processing and minimal documentation.

How to Apply For a Loan Against Your Car

  1. Visit Dialabank or Your Bank’s Official Website
  2. Provide Few Details
  3. A Quick Call
  4. Verification
  5. Loan Disbursement

Loan Against Car FAQs

How can I figure out how much EMI I’ll have to pay each month for my Loan against Car?

By inputting a few basic data such as the loan amount, loan tenure, and interest rate into an online EMI calculator, you can figure out precisely how much you’ll have to pay each month.

Will there be a valuation process before the loan against the car is approved?

Yes, some banks have strict requirements for the valuation and verification process that must be completed before a loan may be taken out against an automobile. On the other side, other banks, such as HDFC Bank, do not need value.

How long does it take to get a Loan against Car?

The loan disbursement is completed immediately after the loan application is approved. Depending on the bank, you will receive the funds in your account within a few hours or days.