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
Private 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
- Visit Dialabank or Your Bank’s Official Website
- Provide Few Details
- A Quick Call
- Verification
- 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.
