Loan against car is when a bank or Non-Banking Financial Company (NBFC) provides a loan amount against one’s car. The car is given as security for the loan amount and will be returned to the customer when the loan is repaid in full. If one defaults on payments or does not repay the loan amount, the lender has the rights to sell the car to settle the loan amount for the same.
There are a few banks that provide loan against cars. They are:
1 HDFC Bank:
• Loan amount of up to 150% of the original value of the car is provided to customers.
• Tenures range from 1 year to 7 years
• Interest rates begin at just 13.75%*
• No income documents are required for a loan against car. This is very beneficial for unemployed individuals in need of urgent funds.
2 ICICI Bank:
• Loan amounts of up to 140% of the car’s valuation is provided to existing customers.
• Tenures of up to 7 years are given
• Interest rates are attractive and are provided at the discretion of the bank.
• Documentation is very easy, and the processing of the loan is very fast.
Apart from banks, there are also Non-Banking Financial Companies (NBFCs) that offer loan against cars. Some of the NBFCs that offer this loan option are Tata Capital and Bajaj Finserv.
Documents needed for a loan against car are:
1 ID proof documents which can be submitted in the form of an Aadhar card, passport, Voters ID, a driver’s license or photo ration card with date of birth mentioned
2 Age proof documents which can be submitted in the form of an Aadhar card, passport, Voters ID, driver’s license, photo ration card with date of birth mentioned, employer certificate or college leaving certificate.
3 Income proof is needed if one is a salaried or self-employed individual. Salaried individuals can provide latest salary slip, latest form 16 and bank statements. Self-employed individuals need to show proof of income and IT returns.
4 Address proof documents which can be submitted in the form of telephone bill, electricity bill, passport, driver’s licence or photo ration card with date of birth mentioned.
5 Sign proof is also needed in the form of passport, driver’s licence or banker’s verification.
These documents needed can vary from lender to lender and so it is best to check with the lender you are borrowing from as to what is needed.
To apply for a car loan, click here.