Often there are situations where you might need a quick buck. You are mostly troubled with getting a fresh loan or diluting your investments. What if you knew there is a middle-ground to it? Yes, a middle ground to selling off your investments and going through the hassle of a fresh loan. It is availing a loan against vehicle.
Most people have a car for their convenience, but they might have never thought of putting it to use in such a way. You can avail of a loan against car for various personal reasons. Be it a wedding or a medical emergency; there is no restriction on its usage in any particular way. Moreover, loan against car interest rates are cheaper than a personal loan.
You can avail loan against vehicle in two ways, either a refinance or a top-up. Refinance means availing a loan against car which is hypothecated with the financial institution. Alternatively, a top-up loan can be availed by existing loan takers to get additional finance. Some lenders offer loan against car for tenure up to 5 years and up to 10 years of vehicle age.
Loan against car eligibility can be sought after contacting your financial institution. One is eligible for a loan against vehicle if there is an existing loan on your car. Installments on the previously availed loan should be repaid without defaults. On checking your eligibility, you are granted a new loan against vehicle.
Loan against car interest rates begins around the thirteen percent mark. It is an instant source of finance being affordable than other options in the market. Loan against vehicle is a form of personal source of funding as there is no restriction on its usage.
Let us look at the documents you need to avail loan against vehicle-
Age Proof :
Aadhar number / Passport / PAN / Voter ID / Photo Driving License / Ration Card with DOB / Employer Certificate or ID / School or College Leaving Certificate.
Identity Proof :
Aadhar Card / Passport Copy / PAN / Voters ID / Driving License / Ration Card with DOB
Income Proof :
Salary Slip / Latest Form 16 / Latest ITR
Address Proof :
Ration Card with DOB / Driving License / Passport Copy / Telephone Bill / Electricity Bill / Credit Card Statement / Employer Certificate or ID
The above documents are for the non-corporate entities, and along with those mentioned above, a partnership deed, in addition, will be required for Partnership firms to avail loan against vehicle. Memorandum of Association (MoA) or Articles of Association (AoA) shall be required in addition to the above for corporates.
The variant and age of the vehicle determine the amount of loan. A car in an immaculate condition offers a higher amount of credit. You can avail the loan from the actual value of the vehicle to 1.5 times its value. While obtaining such a loan, adequate care for repayment shall be taken care of. There can be a negative impact on your credit rating in case of non-repayment of default in repayments.
Ensure you select the right lender before availing such a loan against car. Your existing bank or NBFC can help in speeding up the process in case you are a repeat customer. Make the best choice and avail some of the cheapest loans against your car!