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  • Loan against Car is Rated as "Great!" by 91643 Users

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    Loan against Car

    The concept of loans against cars is a very common concept during financial emergencies. If you are struggling to get a personal loan to take care of your personal needs, you can apply for a loan against your car. That’s right! Many a time, your car can act as your best friend in dire situations.

    Most lenders may not be ready to give you an economically priced personal loan if you do not meet the required eligibility criteria. In such cases, you could apply for a loan against your car. When you use your car as a collateral or asset for your loan, your chances of getting your loan application approved will be higher. There are a few banks and non-banking financial corporations in the country that offer loans against cars.

    How does a Loan against Car Work?

    In most cases, the lender will offer a loan of up to 70 to 85% of the prevailing market value of your car. Your loan amount will be pre-fixed as per the value of your automobile. This value will most likely be fixed with the help of car experts who are appointed by the lender. Generally, the loan amount provided for a loan against car ranges from Rs.50,000 to Rs.7 lakh. You can utilise your loan against car for any personal requirements or even for buying a new car.

    When your loan against car is approved, you will be required to hypothecate your automobile to your lender. Hence, this step will prevent you from selling your car until you repay your loan entirely. A loan against car is typically given for a period of 24 months. This can differ from lender to lender.

    In case you decide to pre-pay your loan against car, you will be required to give a pre-payment penalty. This charge will be determined according to when you foreclose during your loan tenure.

    Advantages of Loan against Car

    • When you choose a loan against car, your interest rates will generally be low. It will not be as high as the interest rates of regular loans.
    • You will receive up to 85% of the prevailing price of your automobile.
    • There are not much strict eligibility criteria that need to be followed for getting a loan against car.
    • In case you pledge or furnish your new car for this type of loan, your loan amount will be equal to the overdraft limit after deducting the unsettled dues of your actual car loan.
    • A loan against car is very helpful when you require urgent funds for any kind of need.
    • This loan can be taken even if you purchased your car with a car loan.

    Eligibility Criteria for Loan against Car

    A loan against car is a great alternative when your personal loan application or car loan application gets denied. For personal loan applications, you will typically need to have a steady income with a good employment status. You will also need a high credit score to get a good interest rate for your personal loan application. In case you fail to meet any of the necessary eligibility criteria, you can apply for a loan against car as this loan category does not have strict eligibility criteria.

    However, you will need to meet certain basic criteria in order to get your loan against car application approved:

    • Lenders generally prefer cars that are not more than 5 years old.
    • Lenders prefer cars that are still produced in the market. There are certain lenders that do not accept cars as collateral if they are not manufactured in the market anymore.
    • For loan applicants, there will be an age criterion. The minimum age requirement is usually 21 years and the maximum age requirement is usually 60 to 65 years.
    • Salaried employees, self-employed individuals, and private limited companies can apply for a loan against car.
    • Applicants should be earning a decent minimum monthly income while applying for this loan.

    Documentation Required for Loan against Car

    While applying for a loan against car, one should compulsorily apply for a loan against car:

    Proof of age:

    • Voters ID card
    • Photo ration card
    • Passport
    • PAN card
    • Employer’s certificate

    Proof of identity:

    • Voters ID card
    • Passport Copy
    • Photo ration card with your date of birth
    • Driving license
    • PAN card

    Proof of income:

    • Most recent Form 16 or ITR
    • Most recent salary slip
    • Salary account statements

    Proof of address:

    • Telephone bill
    • Passport
    • Employer’s certificate
    • Credit card statement
    • Photo driving license
    • Photo ration card

    Legal Documents for Your Car

    When you intend to submit your car as a collateral for a loan against car, you need to keep the following documents ready:

    • Valid motor insurance policy documents for your car
    • Registration certificate for your car (RC book)
    • Driving license for car

    Aspects that Determine the Quantum for Loan against Car

    Your quantum for a loan against car will be determined by:

    • Your car model and make
    • The age of your automobile
    • The total usage of your car
    • The reputation and fame of your car model

    Aspects that Determine the Tenure for Loan against Car

    The loan tenure for a loan against car will depend on:

    • The model and make of your vehicle
    • Your loan quantum
    • If you have a car loan amount or not

    Loan against Car When You Have a Car Loan

    In case you had purchased a car with the help of a car loan, you can still apply for a loan against car depending on your requirements. You may also be able to get a top-up loan very easily when you are already repaying a car loan. Your top-up loan will be disbursed in around 2 to 4 days. The loan tenure for this top-up loan option for existing car loan borrowers is up to 3 years. This is also a pretty common way of securing additional funds for your personal purposes.

    Pre-Approved Loan against Car

    There are certain banks and NBFCs in the country that provide pre-approved loans against cars for a few of their exclusive or privileged customers. The advantages of these pre-approved loans against cars include quicker loan processing and approval, immediate loan disbursal procedures, etc.

    How to Apply for Loan against Car?

    There are a few select banks and NBFCs that provide loans against cars. You may apply offline or online for these loans. You can either visit the official website of your lender or a third-party financial website to make comparisons before applying. You may also call a bank to get help for applying. Before applying, you could use an online EMI calculator to determine the EMIs for your loan against car.

    To apply offline, you can directly go to lender’s branch and complete your application process. A branch executive will help you throughout the application process.

    How to Close Your Loan against Car Responsibly?

    Once you finish paying all the EMIs for your loan against car, you will have to collect a No Objection Certificate (NOC) from your bank. You will then have to furnish this NOC at your Regional Transport Office for getting your car’s hypothecation removed since you have completely repaid your loan against car. Only then, your car’s Registration Certification will be transferred to your name again.

    Top Lenders for Loan against Car

    • HDFC Bank
    • Axis Bank
    • ICICI Bank
    • Kotak Mahindra Finance

    Personal Loan Reviews

    • HDFC Bank Personal Loan
      "Good till date"
      0.5 5.0/5 "Blown Away!"
      I bank with HDFC Bank for the credit card and the offers and limit is good. I am able to access the card all over. There are no charges taken for the card. There are benefits like the cash back and rewards. It has been a good experience till date and I am happy with the services.
      Was this review helpful? 0
      , arrah
      Reviewed on May 26, 2018
    • Bank Bazaar Personal Loan
      "Experience is good"
      0.5 5.0/5 "Blown Away!"
      It was a good experience with Bankbazaar.com and there were no hassles in the overall process. The customer services and response is good and there were no issues to get connected with the banks. There were follow up calls and the website is good.
      Was this review helpful? 0
      , arrah
      Reviewed on May 26, 2018
    • HDFC Bank Personal Loan
      "Overall good"
      0.5 5.0/5 "Blown Away!"
      I have taken a personal loan with HDFC Bank and the rate of interest is of 13.99% and the processing fee is of 2400. The document collection was delayed and after the paper work was taken I got the loan after two days. I got the loan amount as needed.
      Was this review helpful? 0
      , arrah
      Reviewed on May 26, 2018
    • Bank Bazaar Personal Loan
      "Excellent services"
      0.5 5.0/5 "Blown Away!"
      It was a good experience with Bankbazaar.com and there were no hassles in the overall process. The customer services and response is good and they were on time to reach out to me and provide me with the necessary details. There were follow up calls too. The website is also good.
      Was this review helpful? 0
      , raebareli
      Reviewed on May 26, 2018
    • HDFC Bank Personal Loan
      "High on ROI and charges"
      0.5 3.0/5 "Satisfactory"
      It is good experience with HDFC Bank as they collected the documents at the door step. The process was on time and I got it in 15 days. But the rate of interest is on the higher side it is of 15.5% and the processing charges was extremely high, it is of 17K.
      Was this review helpful? 0
      , raebareli
      Reviewed on May 26, 2018
    • Bank Bazaar Personal Loan
      "Excellent services"
      0.5 5.0/5 "Blown Away!"
      I received an immediate response from Bankbazaar.com after I placed a request for the personal loan. I was provided with the necessary details and the arrangement for the document collection was also timely. The website is easy to use and understand.
      Was this review helpful? 0
      , vellore
      Reviewed on May 26, 2018
    • Fullerton Personal Loan
      "Good process"
      0.5 5.0/5 "Blown Away!"
      It was a good experience with Fullerton, the executive came over to my place and collected the documentation for the personal loan. The process was completed in 15 days. I am not sure about the interest rate. The processing charges is around 8K. I got the loan amount as needed.
      Was this review helpful? 0
      , vellore
      Reviewed on May 26, 2018
    • IndusInd Bank Personal Loan
      "Good. Can be more quicker"
      0.5 5.0/5 "Blown Away!"
      It was a good process with Indusind Bank for the personal loan. Initially I was told that is a paper less process and later I had to submit the complete set of documents and I had to sign so many forms. They took a long time to disburse the loan too, they took two weeks. The rate of interest is of 12% and the processing fees was zero.
      Was this review helpful? 0
      , pune
      Reviewed on May 26, 2018
    • Bank Bazaar Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      It has been very good response from their side, there has been time to time responses. There has been good reminders. I have started using recently with the services. I have been using their application and it had been easy in using it. There has been no issues faced so far.
      Was this review helpful? 0
      , chennai
      Reviewed on May 26, 2018
    • Kotak Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      The overall experience i had with them had been very good. It took appropriate time in the process and i had received the loan in two weeks. The response from them had been very good, and there has been good solutions from their side. It has been a good quote and i was satisfied with the loan amount.
      Was this review helpful? 0
      , chennai
      Reviewed on May 26, 2018
    • ICICI Bank Personal Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      The process has been very good when i have taken this loan, it has taken almost a week to get this loan amount. The process was easy as i already had an account with the same bank. The loan amount had been satisfactory and i have taken it for my personal expenses. The rate of interest also had been less as well, it was 12%.
      Was this review helpful? 0
      , thane
      Reviewed on May 26, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      The overall loan experience had been very good and satisfactory. I have taken this loan for marriage purposes, the process has took more time than usual. But the customer service had been good, the rate of interest was a little high but which was 13%.
      Was this review helpful? 0
      , thane
      Reviewed on May 26, 2018
    • Bank Bazaar Personal Loan
      "Good. Can do better"
      0.5 3.0/5 "Satisfactory"
      After I placed my request for the personal loan through Bankbazaar.com, they contacted me on time and informed me the details and processed it to the banks as well. It would be better if the Amazon gift voucher is sent to me on time and I should have followed up for it.
      Was this review helpful? 0
      , chennai
      Reviewed on May 26, 2018
    • Citibank Personal Loan
      "Satisfied"
      0.5 4.0/5 "Great!"
      The overall experience was good at Citibank and the it was a quick process to get the personal loan. The rate of interest is 12.99% and the processing charges is of 750 which is very minimal when compared to the other banks. It would be better if the EMI date is more flexible as my EMI date is on the 1st of every month and I am unable to change the same. When I contacted the bank I was told that it is the same date for all the customers. The disbursement was as per my need.
      Was this review helpful? 0
      , chennai
      Reviewed on May 26, 2018
    • ICICI Bank Personal Loan
      "No hassles"
      0.5 4.0/5 "Great!"
      I hold a personal loan with ICICI Bank and the process to get the loan is good. The documentation is minimal and there were no hassles to get my loan through. I was also comfortable with the rate of interest and processing charges. The after loan service is also good.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 26, 2018
    • ICICI Bank Personal Loan
      "ICICI personal loan"
      0.5 4.0/5 "Great!"
      I have taken a personal loan from ICICI bank and the approved loan amount was 1.5 lakhs.The rate of interest was 11.50% and the monthly EMI comes around 3800 for a tenure of 4 years. There was a processing fee of 1% of the approved loan amount.
      Was this review helpful? 0
      , gaya
      Reviewed on May 25, 2018
    • Bank Bazaar Personal Loan
      "Excellent service"
      0.5 4.0/5 "Great!"
      It was my first time experience with bankbazaar and the response from there end for the loan application was very excellent. They were so much professional and i got the loan approved on the right time. since i gone through bankbazaar i could able to experience the benefits with the team. I will consider them in future as well.
      Was this review helpful? 0
      , gaya
      Reviewed on May 25, 2018
    • Axis Bank Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have taken this loan almost like six months back, the loan amount which they have been provided had been very good. The rate of interest has been fine. The whole process had been very easy and smooth and document submission also had been easy. I have got the loan amount in just two days.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 25, 2018
    • HDFC Bank Personal Loan
      "Good bank"
      0.5 5.0/5 "Blown Away!"
      From HDFC bank i have taken a personal loan and the approved loan amount was 3.6 lakhs. The rate of interest was 10.99% with a monthly EMI of 7921. The total tenure was for 60 months. There was a processing fee of 4000 has been charged. Pre closure can be done after 1 year of the loan approved date.
      Was this review helpful? 0
      , kochi
      Reviewed on May 25, 2018
    • ICICI Bank Personal Loan
      "Considerable bank"
      0.5 3.5/5 "Pretty good"
      My loan was got approved with ICICI bank but unfortunately i could not able to proceed with them as i have dropped the plan. If in future if i am planning to take the loan i can better consider ICICI bank if the rate of interest for the loan amount was feasible.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 25, 2018
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