The coronavirus pandemic and the nationwide lockdown has severely impacted economic activity, forcing many people to re-plan their daily finances.
The coronavirus pandemic and the nationwide lockdown has severely impacted economic activity, forcing many people to re-plan their daily finances. These uncertain times have taught people many new ways of earning, saving as well as planning finances. One such way is taking loan against car.
Banks and lenders in India offer loans against cars at interest rates starting at around 14 percent.
Under this, users can pledge the car so that they can get a loan to meet the immediate financial requirements.
Here are key things to know about taking loan against car, according to CarDekho:
No Documents Required
There is no requirement of income document to get a loan against the car. Also, the disbursal happens quickly into the bank account.
For those who want lower EMI can opt for longer repayment options which can go from one year to five years. EMIs can be as low as Rs 2,300 for each lakh an user borrows.
Cheaper Interest Rates
The interest rate on EMI is much cheaper than for a personal loan. For a loan against the car, users are required only to pay 14-18 percent interest whereas for a personal loan (which is much harder to get) would charge interest as much as 20 percent.
High-Value Loan Amount
When one opts for a loan against a car, he/she is liable to get as much as 200 percent of the value of their car as the loan amount. Based on needs and the vehicle, one can get a loan for up to Rs 25 lakh.
The Car Remains With The User
Even though users are using the car as an asset for availing a loan, they can continue using it for personal mobility. It is not like one has to lose their vehicle to get a loan.
Existing Car Loan
The existing car loan will be paid in full to the current car loan financier and the car loan will be considered closed. As long as users pay 12 EMIs, they are eligible for a loan against the car.
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