If you really think about it, it's easier getting a loan for a car than a loan for bus fare!
  • Car Loan BYTES FROM OUR KITCHEN

    Pros and Cons For Unsecured Car Buying Loans

    Typically, when a person applies for a loan, he or she has to provide an asset - car, home, or any other resource - as security to be eligible for the loan. An unsecured car loan is a debt taken by the borrower to purchase a car without providing any collateral as security. In this type of a loan, the associated risk of the banks or non-banking financing organisations (NBFCs) of incurring losses is more. If a borrower defaults after availing a secured car loan, the lender has every right to seize his or her car to help recover part of the money that was initially invested. On the other hand, in case an unsecured loan is not repaid by the borrower, the only way a lender can prevent incurring any losses is by approaching the court and forcing the borrower to repay the debt. Due to being such a high-risk investment, unsecured loans are quite difficult to come by.

    If you are planning to buy a new or used car and can’t decide whether you want to avail a secured or unsecured loan, you should carefully evaluate the advantages, disadvantages, and risks associated with them. This will help you make the best decision based on your requirements, situation, and convenience.

    Advantages of Unsecured Car Loans

    This scheme has a number of benefits that you should be aware of if you are planning to avail an unsecured loan while purchasing a car.

    • The Car Is Not at Risk in Case of a Default When a person avails a secured car loan, his or her car serves as a collateral that can be used by banks and financing companies to recover part of the outstanding debt. However, if an individual defaults after borrowing an unsecured loan for his or her car purchase needs, the lender cannot seize the car purchased using the loan to recover the money.
    • Simple Application Process While the credit score and credit history of a person greatly impacts his or her loan eligibility, the process of application for this scheme is extremely straightforward.
    • Quick Access to Funds Since the loan application, approval, and disbursal of this type of a scheme is very simple, an individual can have quick access to funds in order to purchase the car that he or she has always dreamed of.
    • Flexible Loan Tenure The biggest benefit of an unsecured car loan is that the borrower has the flexibility to decide and negotiate the term of the loan with the lender. This will not only help the candidate repay the loan easily as per his or her convenience, but will also reduce the allocated risk of the debt.
    • Low Interest For Good Credit Score If you have an excellent credit score and credit history, you might be eligible for an unsecured loan with low interest rates. This is an added bonus in such a scenario since you can not only purchase your car without having to pay a high interest rate on your debt, but also don’t need to provide any collateral in order to avail this loan.
    • No Eligibility Requirements of the Vehicle A number of secured loans can only be availed if the car qualifies the designated requirements of the lender, such as the condition, make, model, age, mileage etc. of the car. This is done so that the financing company can ensure that they can recover the loan using the car in case the candidate defaults. If you opt for an unsecured loan, the lenders are not usually concerned about which car you are buying since there is no need for any collateral. Therefore, you will have complete freedom to choose the car that you want.

    Disadvantages of an Unsecured Car Loan

    Similar to every other financial service, this financial plan also has a few points that you should keep in mind before you decide to opt for this loan.

    • Loan Amount Might Be Less Banks and other financial services companies earn their profit from the interest paid by the borrowers. However, since is no collateral is required to avail this loan, offering a large sum as loan calls for a huge risk that most of the lenders try to avoid. Therefore, the funds received using this scheme is usually less than compared to that of a secured loan.
    • Interest Rates Can Be Higher Since the borrower does not need to provide collateral in order to secure this loan, the lenders often provide the funds at a much higher interest rate to mitigate some of the risk. While the rate of interest offered in this plan is determined by the credit score and credit history of the individual, financial organisations tend to cover most of the charged interest amount upfront through loan application and origination fees.
    • Borrower Ends Up Paying More Due to a higher interest rate, a borrower tends to pay more money as equated monthly installments (EMIs). This leads the borrower to pay a larger sum as interest in the long run. Therefore, it is crucial to ensure that the EMI you pay every month is within your budget before you decide to opt for a unsecured car loan.
    • Credit Profile May Get Affected If a candidate decides to opt for this scheme but is unable to repay the debt on time, it can negatively impact his or her credit profile. This, in turn, might cause future hinderance while availing another loan.

    While there are a number of benefits to an unsecured car loan, it also carries many disadvantages that one should be careful about before deciding to buy a car using this financing plan.

    Car Loan Reviews

    • Bank of Baroda Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      The experience with them has been quite good with this loan where the loan amount has been sufficient. The interest rate which they offered has been nominal when compared with the market rate and there has not been any extra charges which they had made so far. Their customer support team had also been supportive as well.
      Was this review helpful? 2
      , navi mumbai
      Reviewed on Jan 18, 2019
    • HDFC Bank Car Loan
      "Good Experience"
      0.5 5.0/5 "Blown Away!"
      Before three years I purchased second vehicle that is Hyundai I 10 , the documentation process was good with HDFC. The dealer coordinated with the bank, hence the process was quick. I got multiple options but I chosen HDFC, the Interest rate is better because I am an existing customer.
      Was this review helpful? 0
      , delhi
      Reviewed on Jan 18, 2019
    • HDFC Bank Car Loan
      "Good Experience"
      0.5 5.0/5 "Blown Away!"
      I was taken car loan from HDFC, first time I purchased SANTRO car, the documentation was very convenient. They gave me the door step service I went to the dealer and they done the process, and on time I got the car deliver. They gave me the flexible emi option.
      Was this review helpful? 1
      , delhi
      Reviewed on Jan 18, 2019
    • SBI Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been quite a good experience i had with this car loan and the loan amount which they had provided has been sufficient as well. The interest rate with them was around 9.25% which was nominal when compared with the market rate. The charges which they had made has been nominal as well, and even their customer support has been responsive as well.
      Was this review helpful? 2
      , bhubaneshwar
      Reviewed on Jan 17, 2019
    • SBI Car Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been taken my car loan with State bank of India, they have given me sufficient loan amount, and i am satisfied with the loan amount , and the rate of interest they have charged me up to 9.45% which is bit high compare to other bank,i have asked for 9 % but its okay, and the processing fee they have charged me was nominal,overall service is good.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jan 17, 2019
    • Kotak Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been taken my car loan with Kotak mahindra bank recently ,like 2 months before i took this loan, and i am happy with the loan amount they have given me ,it was sufficient for me, and the rate of interest they have charged me up to 9.3% which was nominal for me and the processing fee they have charged me was nominal, the loan amount process went smoothly. the overall service rendered by them was really good.
      Was this review helpful? 1
      , chennai
      Reviewed on Jan 17, 2019
    • Central Bank of India Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It was a good experience i had with this loan and the loan amount which they had provided has been sufficient. The interest rate with them is quite nominal when compared with the market rate. There has not been any sort of additional charges which they had made so far.
      Was this review helpful? 1
      , bangalore
      Reviewed on Jan 13, 2019
    • SBI Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I took my car loan in State Bank of India by last year. The charges are normal. I have spend down payment nearly 1L out of 7L. The branch is near to my residence so will never contact the customer service. The process was immediate and it was completed within 2 days.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Jan 12, 2019
    • HDFC Bank Car Loan
      "Its Excellent"
      0.5 4.5/5 "Excellent!"
      HDFC gave me the door step service for the car loan. I took the loan before three years. It was the fantastic experience for me because I got the better interest, I took the loan for 5 years but I done the foreclose in three years , there was no charges for it.
      Was this review helpful? 2
      , ahmedabad
      Reviewed on Jan 11, 2019
    • Capital First Car Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      The process in getting my Car loan from them has been quite good and the process went smooth. The loan amount was sufficient but the interest rate with them has been quite high when compared with the market rate. Their customer support and their response has been good and has been helpful as well.
      Was this review helpful? 2
      , bangalore
      Reviewed on Jan 10, 2019
    • HDFC Bank Car Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      My car loan experience with HDFC has been good and the loan amount which they had provided has been sufficient. The interest rate with them has been nominal and there has been some charges like processing fee. Overall their has been a help from their customer support as well.
      Was this review helpful? 1
      , pune
      Reviewed on Jan 09, 2019
    • HDFC Bank Car Loan
      "Average Loan Service"
      0.5 3.0/5 "Satisfactory"
      I have approached the bank directly for my car loan. Since I'm existing customer of HDFC for 13 years, i have chosen them. I purchased the loan amount of Rs. 2 lakhs. They have offered me a interest rate of 16% In October 2018, i have closed this loan. Total tenure period of the loan was 3 years. Car Dealer has recommended me about this loan.
      Was this review helpful? 4
      , srikakulam
      Reviewed on Jan 09, 2019
    • Magma Car Loan
      "Average service"
      0.5 1.5/5 "Bad"
      I have been using my car loan with Magma Fincorp previously, they have given me sufficient loan amount ,the rate of interest they have charged me was high,and the processing fee they have charged me was high , i was not happy with there service.
      Was this review helpful? 3
      , ghaziabad
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been using my car loan with HDFC bank, there service is too good, the loan amount they have given me was sufficient,the rate of interest they have given me up to 9% which is nominal for me,and the processing fee they have charged me was nominal only they have charged me up to 1% only,and still my loan is running ,there was no hidden charges they have charged apart from that,overall service is good.
      Was this review helpful? 1
      , ghaziabad
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Nice offer and nice loan"
      0.5 4.0/5 "Great!"
      I had a car loan with HDFC 1 year back. They have given me a nice offer hence i opted the loan with HDFC. I'm not sure about the partial payment and pre-closure facility. They have given me a nice interest rate according to what i want. I was taken a loan amount of Rs. 3 lakhs.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 08, 2019
    • review Car Loan
      "Need to reduce the charges"
      0.5 3.5/5 "Pretty good"
      I have taken a car loan in Nissan Institution, it was good. I bought the car from same showroom and they have provided me a facility. The rate of interest was high. The documentation procedure was simple. I have taken the loan almost 2 years back and its still running. The loan tenure is 5 years.
      Was this review helpful? 1
      , mumbai
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Looking for less interest rate"
      0.5 4.0/5 "Great!"
      My car loan experience was good with HDFC bank, loan amount was sufficient and the rate of interest was high when compared to other banks. Customer service was good and they responded on time. The tenure period for this car loan is for 5 years.
      Was this review helpful? 1
      , new delhi
      Reviewed on Jan 08, 2019
    • ICICI Bank Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my car loan with ICICI bank, the rate of interest they have charged me was nominal and they have charged me processing fee they have charged me which was nominal, the loan amount they have given me was sufficient according to the car price i got my loan, still this loan is running,overall service is good.
      Was this review helpful? 3
      , new delhi
      Reviewed on Jan 08, 2019
    • IOB Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my car loan with Indian overseas bank, the loan amount they have given me was sufficient, they have charged nominal rate of interest they have charged me up to 9 % which was nominal and there is zero processing fee , so far there service is have experience was good, they have not taken any hidden charges ,there overall service is good.
      Was this review helpful? 2
      , mumbai
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Good loan experience with HDFC"
      0.5 4.0/5 "Great!"
      My car loan running with HDFC bank, the customer service is super and the fast approval on the disbursement. They taken 15 days to deliver the car. The principal amount is Rs. 4 lakhs for the tenure of 5 years, the car model is baleno which is latest.
      Was this review helpful? 3
      , aligarh
      Reviewed on Jan 07, 2019
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