A loan against car is a secured loan where a borrower pledges his or her car as collateral to secure the loan. This type of loan is becoming increasingly popular due to the convenience and ease of obtaining it. In this article, we will discuss the benefits of getting a loan against car, eligibility criteria and documents required to get the loan.
Benefits of loan against car:
1. Quick and easy process: Compared to other types of loans, a loan against car is relatively quick and easy to obtain. The approval process is hassle-free and can be completed quickly. The loan is generally approved within a few hours or a day.
A loan against your car, offers several benefits. These include quick access to cash without a credit check, allowing individuals with no credit history to secure funds. You can continue using your car while repaying the loan, and the loan amount is often based on your vehicle’s value, providing flexibility. Car title loans are typically short-term, offering a temporary financial solution. Plus, you don’t necessarily need a bank account to qualify. Making timely payments on the loan can even contribute to credit improvement, enhancing your financial prospects in the long run.
2. No credit check: The loan amount is determined by the value of the car, and not based on the borrower’s credit score. This means even those with a poor credit score can get a loan against car.
3. Lower interest rates: A loan against a car usually has lower interest rates compared to other types of loans like a personal loan or a credit card. This is because the loan is secured by the car, making it a less risky investment for the lender.
4. Flexible repayment terms: Borrowers can choose the loan repayment terms that are suitable for them. The majority of lenders offer flexible repayment plans that enable borrowers to pay off the loan in instalments over a period.
Eligibility for a loan against car:
In order to apply for a loan against car, borrowers must meet certain eligibility criteria. The criteria may vary depending on the lender, but some of the standard requirements include:
1. The borrower must be at least 18 years old.
2. The car must be registered in the name of the borrower.
3. The car should be free from any outstanding loans or financial liabilities.
4. The car should not be more than 10 years old.
Documents required for a loan against car:
In addition to the eligibility criteria, borrowers must also provide certain documents to complete the loan application process. Here are some of the standard documents required:
1. ID proof: A valid government-issued ID like a passport, driving license, or PAN card.
2. Address proof: A recent utility bill, bank statement or rental agreement.
3. Car documents: A copy of the car’s registration certificate, insurance papers, and pollution under control certificate.
4. Income proof: Recent salary slips or bank statements that show the borrower’s income.
5. Employment proof: A letter from an employer that shows that the borrower is currently employed and the duration of employment.
However, the eligibility criteria and required loan against car documents differ from lender to lender. Therefore, it is important to carefully go through your lenders requirements to avoid any rejection.
A loan against car is an excellent option for those who require immediate cash but do not want to sell their car. It is a relatively easy and quick loan to obtain, with low-interest rates and flexible repayment options. However, it is important to ensure that the borrower is eligible, and all relevant documents are in place before applying for a loan. This will minimize the risk of rejection and ensure a smooth and hassle-free loan application process.