Getting a personal loan against your assets is a very common practice. One of the securities you can use is your vehicle. If you are going through some financial difficulties then maintaining a car can be very challenging for you in any case. So, using that car to get a loan approved can work for you.
When you apply for a loan against vehicle, the lender will hire an expert to determine the current market value of your vehicle. Most lenders offer loan up to 70-85% of the determined value of the car. Once the loan application is approved, the lender will own your car and you cannot sell it before the loan is repaid. Depending on your lender, you can get up to two years for repayment. If you decide to repay the amount before the tenure of the loan is over, they will charge you a penalty.
To get an approval for a personal loan, you need to have a steady source of income and a good credit score. The respected lenders do not trust any applicant who does not meet these criteria. However, the eligibility criteria for any loan against car are more flexible. Here are the points to keep in mind when you are applying for the loan:
- The car has to be less than five years old. Most lenders disapprove the loan application otherwise
- The car model has to be manufactured and available in the market even today. Discontinued cars are rejected by most lenders
- The minimum age to apply for such a loan is 21 years and the maximum age is 65 years
- A regular source of income from a job, self-employment, or a company is a mandatory requirement to apply for the loan. Your earnings have to be decent enough to show that you can repay the loan
If you are expecting a good loan against car interest rates then you need to make sure to apply from a lender who has a great reputation. They will require you to submit specific documents in the time of application. Here is a list of the most common ones:
- Identity proof: Voter ID, PAN card, passport
- Proof of age: Same as above
- Proof of income: Salary slip, account statement, and Income Tax Return (ITR)
- Address proof: Telephone bill, passport, and photo ration card
- Car documents: Driving license, car registration document, and car insurance document
The value of your car and the tenure of the loan are decided based on the maker of your car, the model, the age of the car, and if you have a car loan.
Finding the best lender to get your loan against car
Once you are sure that you meet the loan against car eligibility requirements, you can start looking for reputed lenders. Take your time to compare the different loan providers to find the best option for yourself. Make sure that you maximize your benefits.